BlockTribune recently published a report indicating evidence of wash trading on Crypto.com. Following the publication, a spokesperson from Crypto.com contacted BlockTribune and "demanded" an edit to the report, objecting to the characterization of Crypto.com as an "exchange."
According to BlockTribune's initial report, their analysis was based on methodologies outlined in a U.S. Securities and Exchange Commission (SEC) presentation authored by Bitwise. The presentation outlines indicators that can signal wash trading, such as Price-Volume Correlation (CORR) and Trading Volume Variance (VAR), which can be used to assess the authenticity of trading activities.
BlockTribune concluded that more than 70% of trading activity for popular pairs like ETH/USD, ETH/USDT, BTC/USD, and BTC/USDT on Crypto.com may lack economic value after analyzing CORR and VAR metrics.
The analysis involved comparing these metrics with those from peer exchanges. For instance, on August 20th, Crypto.com's trading volume for BTC/USDT was reportedly three times larger than Binance's for the same pair, yet the CORR and VAR values were significantly lower at Crypto.com. A low correlation between trading volume and price fluctuation suggests that actual market sentiment might not be accurately reflected.
Investopedia describes Crypto.com as a "cryptocurrency exchange" that allows users to "buy, sell, or trade cryptocurrency." BlockTribune also captured screenshots from the Crypto.com website where it referred to itself as an "exchange."
Kris Marszalek founded Crypto.com in Hong Kong in 2016 before relocating the company to Singapore. According to CoinMarketCap, the exchange operates in every U.S. state except New York and reported a daily spot trading volume of $5.58 billion as of October 8th.
