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Chinese Bitcoin Exchange Accused of Faking Trade Data

Posted by ryuzaki0 on from the fudging-the-numbers dept.

An anonymous reader writes in with this story about some questionable numbers reported from bitcoin exchange OKCoin. "Top Chinese bitcoin exchange OKCoin has been accused of publishing fake trading data, artificially inflating the number of currency transactions it is handling. Once China's second-largest bitcoin exchange, OKCoin is claimed to have published unrealistically high trading volumes in the wake of the Chinese central bank imposing a ban on financial institutions handling the crypto-currency. The ban saw several exchanges halt all incoming deposits, but OKCoin's trading data failed to show the dip experienced by fellow exchanges."

10 of 75 comments (clear)

  1. No Such Thing by mythosaz · · Score: 5, Insightful

    No such thing as bad press if you're Bitcoin. Just keep it in the news, and it'll stay worth something.

    $658 as I type this.

    1. Re:No Such Thing by girlintraining · · Score: 2

      No such thing as bad press if you're Bitcoin. Just keep it in the news, and it'll stay worth something.

      There's a lot of negative things I could say about bitcoin, but this situation is the one case where I might have something good to say. Every bitcoin has a transaction log associated with it. If they're alleging higher volumes than other believe... Why not simply "query the database" as it were and analyze the data. This would be a fairly straightforward procedure for a forensic accountant.

      There is no need for speculation in this case; It's one of the few things about bitcoin that we can make objective statements about.

      --
      #fuckbeta #iamslashdot #dicemustdie
    2. Re:No Such Thing by TheCarp · · Score: 3, Insightful

      > Every bitcoin has a transaction log associated with it.

      Except exchanges don't necessarily need to use bitcoin to trade bitcoin. If you deposit money in a bank, and then wire the funds to another account, and then withdraw them, would you expect to get the same bills back? Of course not! The bank tosses your bills in with the rest and then hands back different ones from the pool.

      So if I send bitcoins to an exchange and sell them, then the buyer sells them later, that is 3 transactions (me sending them btc, me selling them, someone else selling them) only one of which must be in the block chain and that one isn't even counted as part of the volume!

      So yes, you are right:

      > Why not simply "query the database" as it were and analyze the data. This would be a fairly
      > straightforward procedure for a forensic accountant.

      Correct but the database is the private database of the exchange, which then should be correlated with the public block chain, but likely has a lot of information not otherwise in the block chain.

      -Steve

      --
      "I opened my eyes, and everything went dark again"
  2. Re:So this should kill itself, right free market? by mythosaz · · Score: 2, Interesting

    I can't figure out why any bitcoin anywhere is in a "bank" that isn't your wallet, or the backup of your wallet.

    As if the Magic the Gathering Online Exchange is where I want to keep my money...
    http://en.wikipedia.org/wiki/Mt.Gox

  3. Re:So this should kill itself, right free market? by killkillkill · · Score: 4, Informative

    Not that I endorse Mt. Gox (quite the opposite, really), but can we stop trowing "Magic the Gathering Online Exchange" into the conversation. The code for the trading platform designed for cards and the original owner/developer are long gone. The name is the only thing left. There are plenty of things to criticize the exchange over without this ad hominem.

  4. Re:China by mi · · Score: 5, Insightful

    The Chinese never met a game they didn't cheat at.

    That's what decades under a totalitarian rule do to people... They see nothing wrong in cheating the government because, as they were growing up, there was nothing but the government doing things — doing poorly and dishonestly. Myself having grown up in the USSR I sympathize...

    And now that the cheating is deep in most people's minds, it is very hard to stop applying it even to non-governmental parties. A generation or two of honest rule must pass — and China has not even started yet. Meanwhile the US — formerly known as the shining house atop the hill — is marching into the wrong direction with an increasing cadence...

    --
    In Soviet Washington the swamp drains you.
  5. Other exchanges may fake data, too. by Animats · · Score: 2

    During periods of heavy trading, Mt. Gox trade data has repeatedly been observed to be unrealistic. Sometimes it gets very strange. During heavy trading periods, trades are often done out of order. Delays up to 46 minutes have been reported. Whether this is incompetence or market manipulation has never been entirely clear.

    (Despite all the hype, Bitcoin transaction volume is not large. Most exchanges do a few transactions per minute.)

  6. Re:So this should kill itself, right free market? by kruach+aum · · Score: 2

    Not so long as Cosby coins are still funny.

  7. Re:So this should kill itself, right free market? by Phreakiture · · Score: 2

    Berkshire Hathaway was once a textile manufacturer. That has nothing to do with their present business.

    --
    www.wavefront-av.com
  8. Re:Unregulated... what? by Lloyd_Bryant · · Score: 4, Insightful

    Apropos of nothing, has unregulated speculation decreased since the SEC was established?

    Wish I had mod points. The reality is that the SEC is to unregulated speculation what the TSA is to terrorism - just a show to convince the people that the govermnet is actually doing something about the problem.

    Maye we should add the term "regulatory theatre" to the lexicon along side "security theatre"...

    --
    Don't tell me to get a life. I had one once. It sucked.