China's National Association of Internet Finance (NIFA), a self-regulatory organization established by the People's Bank of China, has warned that crypt currency exchanges are falsifying data on trading volumes.
On Thursday, the NIFA published a report saying foreign trading platforms use "robotic programs to falsify data or create the appearance of a market for active virtual currency trading.
"We conducted a sample analysis and found that 40 coins have a daily turnover of 100%, while another 70 have a turnover above 50%. The prices of these assets are relatively low, but the trading volumes are unreasonably huge. Some exchanges copy trades from other platforms, thus providing false trading data," writes the NIFA.
The association also reported on the use of various tricks to attract new users. For example, some platforms intentionally inflate the rush around the fact that cryptovalues are able to act as a safe asset on a par with gold and silver. The NIFA believes this is far from the case.
"First, investors are encouraged to invest in crypt currencies, and then some exchanges start manipulating the market to steal other people's assets," the report says.
Some exchanges may stop their systems for a certain period of time, so that users can not carry out trading operations and thus incur significant losses. At the same time, operators of crypt currency exchanges are "relatively hidden" and often do not indicate their real location.
In September last year, Bitwise Asset Management stated that approximately 95% of the trading volume of Bitcoin was created by exchanges "out of the air", and in March an anonymous group of researchers CryptoIntegrity published a report according to which 86% of transactions and 88% of trading volume on cryptographic exchanges are created artificially.
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