Wash trading gone wrong – how a $100M/day crypto exchange bankrupted itself

BaseFEX, a crypto exchange that positioned itself as a Bitmex alternative, found itself bankrupt due to wash trading. Wash trading is a deceptive practice used by exchanges to fake trading volume and attract more customers. BaseFEX utilized rudimentary methods of faking volume, such as printing fake trades and executing real trades through bot accounts. However, a user named Bertyar88 was able to detect the fakery and created a simple trading bot to take advantage of it. The bot generated significant returns for Bertyar88 but led to the admins discovering the exploit and banning him. Without the wash trading bot, BaseFEX’s trading volume plummeted, and the exchange eventually went offline. Bertyar88 was unable to withdraw his earnings, but he can take pride in bringing down a major crypto exchange with minimal resources and coding skills.


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