Can exchanges create imaginary Bitcoin to dump price? Crypto platform exec answers
One of the most substantial value propositions of Bitcoin (BTC) is that no one can create more of it apart from its fixed supply. However, an executive from a crypto exchange made a bold claim that some exchanges can create and sell BTC that's only in their system, not on the blockchain, to manipulate the market.
In an interview with Cointelegraph, Serhii Zhdanov, the CEO of crypto exchange Exmo, shared his beliefs that market manipulation is still prevalent in the digital asset space and gave an example of how it can happen.
According to the executive, if anyone wanted to dump the market, it’s possible to go to an offshore exchange that does not go through financial audits and ask for $100 million worth of BTC and use $10 million Tether (USDT) as collateral. He explained that:
To get their profits, the market manipulators can then profit from arbitrage according to Zhdanov. “After the price is down, they buy the same amount of Bitcoin at a much lower price and make a profit,” he added.
The CEO said that fighting and preventing these potential events require stronger regulatory policies that are as comprehensive as the stock market. Zhdanov highlighted that offshore exchanges must also be regulated in the same manner as tier one exchanges or have transactions between regulated and offshore exchanges be limited. With this, the executive believes that the market will be a better place for investors of all sizes.
Related: Analyst claims that exchanges sell your Bitcoin, crypto trading platforms respond
Additionally, the executive pointed out that one of the barriers to mainstream crypto adoption is the money laundering concerns. According to the CEO, compliance and more comprehensive regulation will make these concerns go
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