A0453
Title: Detecting and understanding wash trading on cryptocurrency exchanges
Authors: Jan Sila - UTIA AV CR, v.v.i. (Czech Republic) [presenting]
Ladislav Kristoufek - Charles University Prague (Czech Republic)
Jiri Kukacka - UTIA AV CR, v.v.i. (Czech Republic)
Evzen Kocenda - Charles University (Czech Republic)
Abstract: Wash trading on cryptocurrency exchanges is investigated, and the behavioral and socioeconomic factors are considered to influencing wash trading volumes. The findings show that wash trading is common on unregulated exchanges across asset classes, with exchanges inflating volumes by 50 per cent at times. These artificial volumes skew prices and boost exchange rankings. Strong correlations are found between wash trading volumes and external indicators such as Google search trends and return momentum, implying that market sentiment and socioeconomic conditions motivate exchanges to increase wash trading volumes as they compete for retail crypto traders by improving their rankings.
