The national self-regulatory organization for the Chinese internet finance sector has warned cryptocurrency investors that exchanges are manipulating trading volumes to attract new customers, 8btc reports.
The National Internet Finance Association (NIFA), founded by the People’s Bank of China, calls on individuals and companies “to strictly abide by national laws and regulatory requirements, and stay clear of virtual currency transaction activities and related speculation”.
NIFA drew investors’ attention to the fact that, against the backdrop of financial market turbulence, some exchanges hyped cryptocurrencies as “safer hedge assets than gold and silver”. The organization believes that investing in digital currencies will lead to financial losses for investors.
“What’s worse, some exchanges faked their prosperity by increasing traffic with bots software, or tampering with transaction data, etc,” NIFA said.
According to a selective analysis of the transactions of some exchanges conducted by the organization, more than 40 cryptocurrencies daily trading volume exceeded their market capitalization. Another 70 digital assets have a daily turnover of more than 50% of their issue.
“Some platforms resort to copying the transaction information of other exchanges to fabricate a huge transaction volume when the prices and valuations of their virtual currencies are low,” NIFA added.
Recall, Bitwise Asset Management analysts previously concluded that 95% of trading volumes on non-regulated exchanges are fake.