Opinion of: Tracy Jin, Chief Operating Officer, Mexc
Market manipulation may be seen in every single place and yet. It is an invisible threat to crypto and traditional markets, so that standard retailers count the prices. Manipulation is usually obvious – illiquid tokens which are pumped high before they’re unloaded as quickly – but often it’s more subtle and difficult.
In addition, it’s that these schemes are not any longer the domain of rogue whales or amateur pump groups. Signs increasingly indicate highly organized, well-financed networks reminiscent of coordinating activities about centralized stock exchanges, derivate platforms and onchain ecosystems. When these actors grow in sophistication, their threats to market integrity grows exponentially.
A story as old as time
Market manipulation is as old because the markets themselves. In ancient Greece, a philosopher called Thales of Miletus used his knowledge of weather patterns to predict a bumper olive harvest and to lease all olive presses within the region quietly before the beginning of the season. Then when the harvest got here in and rose after pressure samples, he rented it at excessive prices and inserted the difference.
For a more recent historical example, albeit for 300 years previously, see the South Sea Company Bubble, wherein corporate directors throw stocks at top prices and the regular investors remained REK. Or the Dutch tulip bubble of a century before.
Market manipulation has been in crypto for the reason that first stock exchanges got here towards 2011 around 2011. Those who were nearby on the time may remember the pump-and-dump programs on the BTC e-Exchange, which were orchestrated by a notorious dealer named Fontas. Or they might remember Bear Whale, whose 30,000 BTC Sell Wall crashed the market at a time when the complete every day trading volume was lower than 30 million US dollars – for the complete crypto. Although they will not be technically manipulated out there, she showed how easily an individual could move the cryptoma market.
Fast result in this present day, and crypto is a multi-billion dollar assets class that makes the manipulation of LARGE CAP assets for single whales practically inconceivable. But if a bunch of shameful dealers works together, it remains to be possible to maneuver markets-and well organized insiders do exactly that.
Manipulators take their step
The times when a single whale could set a BTC sales wall that took weeks until they compete. While crypto is more liquid as of late, it is usually far more fragmented. This offers enterprising dealers opportunities that hunt in packs to steer markets to their advantage. People often work on private telegram groups and coordinate activities which are aimed toward markets on which they’ll have the best effect. The trend illuminates the growing participation of necessary players in market manipulation schemes and represents a brand new risk for the crypto industry.
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In February, analyst James Cryptoguru warned of a big scale of manipulation risks with spot bitcoin ETFs. He explained that these instruments could exert the Bitcoin price down – especially if the normal financial markets are closed. Such a technique could trigger liquidations between the levered dealers and lead temporary imbalances, so that enormous players can accumulate BTC and ETH at reduced prices.
Since crypto-Sowohl Onchain and on-exchange-strong, the wavy effects of a successful attempt at manipulation extend far and wide. If an APIS for feeding other markets is deleted from a central stock exchange from synchronization, it may well generate Arbitrage options elsewhere, including the perpetrator markets. As a result, an attack on an exchange may be initiated, and the profits for an additional, which makes it extremely difficult to catch the guilty.
The integrity of the cryptocurrency market is exposed to an increased risk. Coordinated groups have deep bags, technical tools and cross-platform access to execution and mask complex processes. The worrying part is that almost all of the design exchanges remain reactive since it is practically inconceivable to stop market manipulations. As a result, attackers have a high likelihood of maintaining the advantage, even when the window where you’ll be able to run freely is getting smaller.
Not all manipulators break the principles
Just as Thales of Miletus doesn’t violate the principles when he benefited from the olive season, a big a part of crypto manipulation is just not illegal. If an enormous fund starts buying a certain token over one in every of your public wallets to draw attention – is manipulation? Or if market makers transcend the easy agreement of BID-ASK spreads to actively increase the worth of a tokens on the request of a project? Many things move markets, but mainly things that will not be illegal – not less than not now.
While the moral code for influencers, market manufacturers, trading corporations and other players may be discussed intimately, other cases require fewer nuances. The last time someone has checked and 1000’s of exchange accounts that were occupied by dozens of users to inflate a certain asset is apparent manipulation. The exchange, supported by all the time highly developed AI-driven tools, defend themselves.
The days when a user would cause Mayhem markets may be over. However, the threat has not been resolved within the multichain, multi-exchange era. As a result, the stock exchanges at the moment are enclosed in a game with a whack a mole with a view to recognize suspicious behavior at the identical time from lots of or 1000’s of accounts.
Fortunately, stock exchanges shouldn’t have to do it alone, as successful cases of cooperation show. When Bybit was hacked in early 2025, other platforms occurred to offer ETH and help him fulfill his withdrawal obligations – a rare but strong sign of solidarity in view of the crisis.
A well-financed, highly organized groups proceed to check the system, one thing becomes clear: manipulation of the market may be relatively easy-but it’s increasingly difficult to acknowledge this. Collective vigilance, data exchange and early detection becomes essentially the most effective instruments to guard the integrity of the crypto -ecosystem.
Opinion of: Tracy Jin, Chief Operating Officer, Mexc.
This article serves general information purposes and shouldn’t be considered legal or investment advice. The views, thoughts and opinions which are expressed listed below are solely that of the creator and don’t necessarily reflect the views and opinions of cointelegraph or don’t necessarily represent them.
