Have you heard the new statement of Serhii Zhdanov? There is a popular question that circulates among a section of the new as well as experienced Bitcoin investors. The question is – “Can exchanges create BTC that are only on their network, to manipulate the market?” Most experts would state that this is cannot be the case. In fact, they would argue that no one can create more Bitcoin than what is originally on the supply chain. Such an explanation might have sounded perfectly correct, until recently.
In fact, recently one official from a certain crypto exchange stated that there are some exchanges which can create and sell BTC that are only on their network, to manipulate the market. The official stated that such created BTC would not be present on the blockchain. This is done in order to manipulate the market in a very problematic manner. If you wish to learn more about the claim made by the official about creating and selling BTC, then this article is the perfect stop for you. Keep reading this article for a better understanding of the claim made by the crypto official.
Serhii Zhdanov: What The Official Said
Serhii Zhdanov, the CEO of crypto exchange Exmo attended an interview recently with Cointelegraph. In that interview, Serhii stated that in the digital asset space, market manipulation is still going on. In fact, he did not stop at this claim. He also provided instances to explain how the thing occurs in reality.
According to Serhii, if someone wants to manipulate the crypto market, then the easy way out is to visit an offshore exchange. However, it is important here to mention that not all offshore exchanges can be effective in this regard. Only those exchanges which do not go through financial audits can be helpful in this regard. Visiting such an exchange one needs to ask for BTC worth $100 million against $10 million Tether as collateral. After this, as Serhii explains, that exchange simply adds the BTC to their account only. Therefore, those BTC exist only in their system, and not on the BTC blockchain. Such Bitcoins are sold thus, manipulating the BTC price.
Serhii further added that such manipulators can then earn profit from arbitrage. That is to say, when the market price comes down, they purchase BTC at a very low price and thereby earn profit. As far as preventing such market manipulation is concerned, there is the requirement of strict regulations and rules similar to the ones of the Stock Market. Serhii further added that strict regulatory policies should also be implement in the offshore exchanges too. Therefore, the transactions of those exchanges should also be regulate properly. Only then the market manipulations may be avoided and prevented.
Therefore, Serhii Zhdanov, the CEO of crypto exchange Exmo lays down in detail how exchanges can create and sell BTC thereby manipulating the market. This is something which really needs to be stopped. In fact, Serhii also suggests ways to do that. Therefore, authorities must take into account these suggestions to prevent any further BTC market manipulation.