Huobi’s Reported Trading Volume Changed After Bitwise Report

Singapore-based Huobi Global has reportedly taken extra steps to ensure that wash trading isn’t happening on its platform after it was named by
Bitwise’, presented to the US Securities and Exchange Commission as part of a Bitcoin ETF application, alleged that only a small percentage of Bitcoin trading volume was real, and that wash trading is present in some way on the vast majority of crypto exchanges–intentionally or unintentionally.

is when traders collude to sell an asset back and forth to one another while increasing prices. This gives the illusion that a market’s trading volume and an asset’s value is rising.
CEO of Huobi Global Livio Weng told CoinDesk that wash trading goes against the exchange’s “core values” and that the exchange is “not involved in any wash trading.” However, it’s still possible that wash trading could be happening on Huobi without the exchange’s knowledge.
Still, the report alleging that Huobi has a wash trading problem came as a “surprise” to the Huobi team, Weng said. He said that the exchange “subsequently did a thorough check and review of our system,” and did not find any evidence of internal abuse.
However, Weng did concede that “we did identify a few of our market makers conducting what we suspect may have been wash trading for the sake of performance and marketing purposes. We have already communicated with these market makers and they have discontinued the strategies in question.”
Not So Fast…
A second report by Bitwise sheds an interesting light on Weng’s statements.
Bitwise’ initial report alleged that of the exchanges it analyzed, Bitfinex, bitFlyer, Binance, Bitstamp, Bittrex, Coinbase, Gemini, itBit, Kraken and Poloniex were the only ones that did not have false trading volume on their platforms.
However, the second report (published last Friday)  alleged that Huobi’s reported trading volume was noticeably different several weeks after the original report was published. Previous to the report, Huobi had an “anomalous” trading pattern that indicated a “resurgence of large trade sizes.”
“Then it completely disappeared within three weeks” of the first Bitwise report, according to the second report. “Those engaging in wash trading at Huobi changed their trade size signatures to be more in line with our detection methods.”
“We also recognize that Huobi might have taken action to clean up wash trading on their platform within that time frame, but that view is challenged by the fact that Huobi’s reported bitcoin trade volume did not meaningfully drop during that time.”