An analysis conducted by Block Tribune concluded that data from the cryptocurrency exchange Crypto.com (CDC) shows indications of wash trading, or artificial market activity that inflates an asset's trading volume and price. A CDC spokesperson denied the report.

To conduct its analysis, Block Tribune followed methodologies outlined in a U.S. Securities and Exchange Commission (SEC) presentation authored by Bitwise, which outlines the indicators that can signal that wash trading is taking place. According to the SEC presentation, Price-Volume Correlation (CORR) and Trading Volume Variance (VAR) can be used to assess the authenticity of trading activities. Analyzing CORR and VAR on CDC, Block Tribune concluded that more than 70% of trading activity for popular trading pairs ETH/USD, ETH/USDT, BTC/USD, and BTC/USDT may lack economic value.

Wash trading is a market manipulation tactic in which traders attempt to artificially inflate the value of an asset, typically by trading between multiple accounts or wallets they control. This activity creates an illusion of high demand for an asset but can look like genuine market activity to observers. Observers may then gain more confidence in an asset and choose to buy it, increasing the asset's price and visibility.

Block Tribune analyzed the CORR and VAR for popular trading pairs on CDC and compared them with the trading volume of those pairs on peer exchanges. In one example, on Aug. 20, CDC's trading volume for BTC/USDT was three times larger than the pair's trading volume on the crypto exchange Binance, but the CORR and VAR values on CDC were markedly lower. A low correlation between trading volume and price fluctuation signals that actual market sentiment may not be reflected.

Block Tribune obtained its data from TradingView; however, a CDC spokesperson confirmed that there were no identified issues with the data. The spokesperson also said the company has not been contacted by regulators about alleged market manipulation. Tony Sio, Head of Regulatory Strategy and Innovation at Nasdaq.com, said washing trading "is likely the simplest of market manipulation schemes" and can open the door to more serious illicit financial activity.

Kris Marszalek founded CDC in Hong Kong in 2016 and later moved the company to Singapore. The exchange is available in every state in the U.S. except New York. It has a daily spot trading volume of $3.99 billion.