- Gotbit inflates trading volumes on obscure cryptocurrency exchanges for a fee and has about 30 token projects as clients.
- The firm programs bots to trade tokens back and forth with each other, creating the illusion of active markets so the assets can get listed on CoinMarketCap. Its co-founder says exchanges are aware of this manipulation but are not interested in stopping it.
- While it’s rare to hear market manipulators talk openly about their trade, there are other businesses like this out there, experts say.
To cryptocurrency professionals trying to legitimize their industry, market manipulation is a scourge. To 20-year-old Alexey Andryunin, it’s a living.
A sophomore at Moscow State University, Andryunin is the co-founder of Gotbit, a firm that specializes in making obscure cryptocurrencies look like they’re being actively traded. For a fee, the two-man shop will program bots to trade a token back and forth with each other on also-ran exchanges until it has enough “volume” to get listed on CoinMarketCap. Once it appears on that influential market data site, an asset can gain the attention of larger platforms and bigger investors.
Explaining why Gotbit is not registered in any jurisdiction, Andryunin was blunt, telling CoinDesk:
“The business is not entirely ethical.”
The business is not entirely unheard-of, either, in a global market notorious for its lack of transparency. Bitwise Asset Management, one of several U.S. firms seeking regulatory approval to launch a bitcoin exchange-traded fund (ETF), has estimated that 95 percent of bitcoin trading volumes are faked and only 10 exchanges publish reliable data about volumes on their platforms,