CEX.IO News

Your Security Is Our Top Priority

, April 19, 2019

We have recently prevented a market spoofing attempt on our exchange with the help of complex security measures and our team’s expertise. In light of this event, we want our customers to be aware of market manipulations specific to cryptocurrency trading.

Moreover, we want to send a clear message to anyone who might plan to initiate or participate in market spoofing of any kind on the CEX.IO exchange.

The security of our users is our primary focus, and we make every possible effort to ensure our reliability and reputation. We closely observe the market, the behavior of individual participants (if necessary), and possibilities for market abuse and manipulation.

What is market manipulation?

Market manipulation refers to any activity aimed at distorting the price or trading volume of an asset. Through their activities, manipulators create artificial market conditions, and as a result, other market participants get misleading information. Under these conditions, traders may unknowingly engage in activities that profit manipulators but create a loss for other market participants.  

Types of manipulation

There are several techniques that may be used to shift the value of Bitcoin or any other cryptocurrency: front-running, wash trading, shilling, spoofing, layering, churning, quote stuffing, and more. We’ll explain these strategies in a simplified form.

–       Front-running, also called tailgating, is the practice of creating an order and making a profit based on knowledge of a large upcoming transaction that will affect the price of the asset.

–       Wash trading refers to using personal funds to buy and sell from oneself to create an impression of greater market activity.

–       Shilling involves generating false hype around a particular coin for personal gain or in exchange for payment from another party.

–       Spoofing means placing limit orders and removing them before they’re executed to distort the perception of demand and supply.

–       Layering involves placing and cancelling orders that one would not have executed with the aim of influencing the cryptocurrency price.

–       Churning means conducting excessive trading in a client’s account mainly to generate commission.

–       Quote stuffing refers to creating and closing a large number of orders in an attempt to flood the market and cause confusion in order to create trading opportunities for high-speed algorithmic traders.

What we do to protect your money

We believe that financial markets should have fair and transparent conditions for all market participants. We do our best to prevent any activities that may harm the cryptocurrency market or the majority of investors.

We do this by:

  • using market surveillance to prevent, monitor, and detect manipulation in any form
  • meeting standards for financial markets
  • cooperating with regulatory bodies, such as the Financial Conduct Authority (FCA), to make sure that any fraudulent activity is investigated and punished according to British law.

Market manipulation may result in criminal charges with outcomes varying from fines to a prison sentence.

Related

CEX.IO News

January 2024 Media Report

Explore our January media highlights, and find your COMPASS in our latest Media Report.

Feb 12, 2024 | 6 min read
CEX.IO News

Announcement regarding upcoming Bitcoin Cash Hard Fork

The Bitcoin Cash (BCH) network is to have a hard fork on November 15. We expect the hard fork that may result in the current BCH network split and the creation of an additional token. If that happens, CEX.IO will support it and credit a new coin to customers’ balance at a 1:1 ratio.

Nov 09, 2020 | 6 min read
CEX.IO News

October 2023 Media Report

CEX.IO was named “Best Cryptocurrency Platform in Europe” by the 2023 Digital Assets Awards, hosted by The Digital Banker. Read our October 2023 Media report at the link below.

Nov 06, 2023 | 11 min read