Unravelling the Deception: Researching Huobi Exchange’s Fake Volume
@HuobiGlobal recent attempts at wash trading have been one of the most obvious I have ever seen. Let us look at their embarrassing attempt on 2022–12–06 at 23:11:00, where they artificially pumped their volume by over 1000% on ETH & BTC.
This was originally a thread on Twitter, which you can read here.
The random volume spike caught the attention of many traders but was quickly written off as a tradingview bug or whales exchanging hands. I thought it would be a TV bug, but other trading pairs, such as BNB were unaffected so it was no TV issue. So I checked myself.
The historical klines that I got via their API showed the same result. So now there are only a few options left:
- Some calculation bugs occurred
- Whales traded
- An algorithm went rogue
- They propped it up themselves
I downloaded the trades from Huobi’s website and checked if the volume was still correct; it was. To ensure the trades data I got was correct, I checked with Thaddeus his tardis.dev, which records the trades live, and it gave me the same result.
At this point, I thought it would be a rogue algo or some whales playing around. The avg volume from 16:00 -> 23:00 that day was 6.3 ETH per minute, A little over 2500 eth in that 7-hour period. Surely they wouldn’t fake their volume & expect it to go unnoticed, right?
I got the live orderbook & put it next to the live trades to see precisely what happened. Usually, Huobi does 20–60 trades/minute, but after 23:11, the frequency of trades exploded & was sized 1–40 eth per trade. This wasn’t a bot going wild.
There were no big asks/bids to be found in the orderbook snapshots, yet thousands of eth got filled, so what happened? Huobi used 2 accounts, one places a limit order and immediately after, the second account tries to fill it. Do this at a fast enough rate & your users won’t notice it happening. Orders are up & filled within milliseconds. The live trades go at a rapid rate with no abnormally large size, so nothing abnormal is detected. No harm is done.
I find it strange huobi did it this way, they could have used bigger orders, spread it out more etc.. their trading rules allow it. But that is most likely because they want people to think it was a rogue bot.
Perfect defence of course “it was a bot that went wild” however this bot would:
- Need to fill its own orders (disabled on most exchanges)
- Have that much inventory on an illiquid exchange
- Place that many orders that fast without hitting an API limit
I've noticed a couple of other events like this on Huobi but they were in a less obvious way or with limited size I’m guessing this is Huobi’s attempt to try and get more market share.
Our website: https://musca.capital/
Twitter : https://twitter.com/MuscaCapital
Contact us: https://musca.capital/contact
