This is the first part of Bitforex exchange expose.

1. Bitforex — One of The Biggest
Wash Trading Exchanges in the
World
When it comes to cryptocurrency exchanges there are some well-
established names in the industry. The likes of Binance, Kraken and
Bitfinex are known throughout the crypto industry and favored by crypto
enthusiasts and traders. During the ICO rush of late 2017 into early 2018,
these are the exchanges which token holders demanded ICO projects get
listed on in order to boost liquidity and coin price. However, this is easier
said than done as many exchanges charged thousands of dollars for a
coin to be listed.

2. Given the high costs associated with listing on exchanges then an ICO
project must determine if an exchange is worth it by looking at the
trading volume on the exchange among other things. Along with a rise in
the number of ICOs, 2018 also saw a rise in the number of
cryptocurrency exchanges. With many already established exchanges out
there, many of these new exchanges began to utilize what is known as
“wash trading” in order to artificially boost their volume. Wash trading is
the practice of using a bot to buy and sell assets on an exchange in order
to inflate the volume. Wash trading creates a false sense of demand
which makes it seem as though the exchange is very popular and
worthwhile. Through this practice, some exchanges are able to lure ICO
projects and customers by misleading the market. One of the greatest
perpetrators of this is Bitforex, an exchange which proclaims themselves
as the “world’s leading digital asset trading platform” but in reality fakes
around 93% of their volume. Their daily trading volume on January 29th
at 9pm UTC was $242,127,027 meaning that only about $16,948,891 of
that is real!
REPORT
In a recent report by the Blockchain Transparency Institute
(BTI) published in December, it was found that quite a few of the
exchanges listed in the CMC Top 25 had fake volume. Not surprisingly,
Bitforex was one of these exchanges with only 7% of their reported
volume being deemed authentic. The rest of the volume is fake volume
created through wash trading.

4. HOW DOES BITFOREX BENEFIT & CREATE DAMAGE IN
THE CRYPTO ECOSYSTEM
1) Bitforex tricks projects into listing on their exchange and charges them
a 10 BTC listing fee. They do this by providing false trading volume and a
fake legal entity. Unsuspecting crypto projects believe they are listing on
a top reputable exchange which will please their token holders, but
instead, they are simply giving away precious funds.
2) Bitforex uses this high fake trading volume to lure unsuspecting
customers by making them believe that they are a top exchange.
However with their fake volume that isn’t the case. Bitforex then makes
money on these additional customers with the fees they charge for
activity on the exchange. This isn’t the first article to expose the practices
of the Bitforex exchange as others can be
found here, here, hereand here.
CMC Data
The most trusted source for verifying the price of a token or the volume
on an exchange is CoinMarketCap.com (CMC). CMC Data for exchanges
is shown as reported volume and adjusted volume. Adjusted volume is
meant to reduce the instances of fake volume being reported, but if the
report from BTI is any indication, CMC has not been very effective in
stamping out fake volume.
Comparing Bitforex to more well-regarded exchanges such as Bitfinex we
can see that Bitforex appears to have roughly twice the daily trading
volume of Bitfinex.

6. Bitfinex Trading Volume (Thurs. Jan 17th 2019) — Source: CMC

7. Bitforex Trading Volume (Thurs. Jan 17th 2019) — Source: CMC
TRAFFIC & COMMUNITY
One of the ways to justify large trading volumes on an exchange would
be by checking the number of visitors going to this exchange. Every
trader on an exchange isn’t a whale with hundreds of thousands of
dollars worth of cryptocurrency. As such the trading volume should be
somewhat proportional to the daily trading volume over a 24 hour
period if the trading is legitimate.
When comparing Bitforex to Bitfinex in terms of traffic data, there is a
huge difference in the number of monthly visitors to the site. In
December 2018, Bitfinex received around 5.79M visitors, whereas Bitforex
received only 491.24k visitors. The differences between the number of
visitors would lead one to believe that Bitfinex would have a much higher
trade volume, but according to the data from CMC, this is not the case.
In fact, based on the volume data from CMC and the traffic data the
average visitor to the Bitfinex exchange is trading at a rate about $654
per month whereas on Bitforex the average visitor is trading about
$15,535 per month! This simply is not realistic.

8. Bitfinex Traffic Data. Source: SimilarWeb

9. Bitforex Traffic Data. Source: SimilarWeb
WASH TRADING TECHNIQUES
Finally, we can see the fake trading Bitforex utilizes in action here.

10. Bitforex has been performing wash trades and here are some of the
token pairs where these bot trades can be detected.
PRICE DROPPING
In these videos you can see how the Biforex bot manipulates the prices
of tokens listed on the exchange by dropping the prices of these tokens.
A.) Pair: DAV/ETH
Bitforex Pair
Link: https://bitforex.com/trade/spotTrading?commodityCode=DAV&cur
rencyCode=ETH
https://vimeo.com/318295396
B.) Pair: EDR/ETH
Bitforex Pair
Link: https://bitforex.com/trade/spotTrading?commodityCode=EDR&curr
encyCode=ETH
https://vimeo.com/318297579
FAKE VOLUME TRADING
This section denotes the fake volume trades being run by the Bitforex
bot.
Note: For the videos and respective tokens shown in this video, they all
have one thing in common — fake trades generated by the Bitforex bot.
Trades are sometimes randomized but most times the trade is initiated
at the same volume or price. Also, these trades occur at random times to
ensure that 24-hour volume is maintained.
The first video and screenshot in this section show what to look out for
in the other videos, namely: a high 24hr generated volume at the top,
and a series of fake trades initiated by the bot in the far right columns.

11. A.) Pair: EDR/USDT
Bitforex Pair
Link: https://bitforex.com/trade/spotTrading?commodityCode=EDR&curr
encyCode=USDT
https://vimeo.com/318300115
B.) Pair: ELAC/BTC
Bitforex Pair
Link: https://bitforex.com/trade/spotTrading?commodityCode=ELAC&cu
rrencyCode=BTC
https://vimeo.com/318300379
C.) Pair: EVT/ETH
Bitforex Pair
Link: https://bitforex.com/trade/spotTrading?commodityCode=EVT&curr
encyCode=ETH
https://vimeo.com/318300669
BITFOREX STAFF & HIDDEN LEGAL ENTITY
Faking cryptocurrency exchange volume and committing fraud is a
serious offence which financial institutions around the world are
beginning to take note of. Recently, two leaders of the South Korean
exchange Komid were sent to jail for their part in faking exchange
volumes. The guys involved in the Bitforex exchange volume faking
include: Jason Luo and Garrett Jin.
The legal entity provided by Bitforex to projects which want to list with
them is not known by the financial authorities in the Seychelles or
Singapore (where Bitforex is said to have offices). In fact, after a visit to
their supposed office in Singapore, no one there had even heard of

12. Bitforex. A follow up to locate another address via their Telegram
support group proved unsuccessful as moderators refused to answer.

14. Bitforex Fake Entity:
2, KALLANG AVENUE, #07–33, CT HUB, SINGAPORE 339407. Entity
Name:
BITFOREX CHAIN PTE. LTD
In fact, the team behind Bitforex has even admitted to using bots on
their website. We were able to get some screenshots from a project
affected by BitForex’s actions where they show this. Their claim is that
this bot is used to make a better user
experience. https://ibb.co/LkhXzMchttps://ibb.co/DzbZkgfhttps://ibb.co/
ZXPPqzF
CONCLUSION
Bitforex is an exchange which engages in nefarious fraud practices to
take advantage of unsuspecting crypto projects wanting to list on the
exchange and consumers wanting to trade. Projects should avoid listing
on this exchange unless they want to lose their funds. Consumers should
also avoid this exchange as most of the volume on this exchange is fake
and they should instead use more reputable exchanges.