CoinsBank: 145 million dollars of fake volume

A superficial look at CoinsBank

According to coinmarketcap.com CoinsBank is a top 20 crypto exchange with a trade volume of about 145 million dollar per day. In particular, again according to coinmarketcap.com, it is the exchange with by far the biggest EUR-BTC and GBP-BTC volume. The price of Bitcoin appears to be consistently a bit below the market price.

A closer look.

In the order book of each market there is quite a gap between the buy and sell orders, but nevertheless there appears to be a lively trade activity with prices in between this gap taking place.

However, if someone tries to place a buy order with a price in the lower part of the price range of these "trades", they move to a price a bit above the order, but, like magic, never hit the order. Also strange, the buy and sell orders which lead to trades appear in the order book and immediately disappear again, so one has no chance of adjusting a buy order to meet a sell order in that price range.

Now, if one places an order above the price range of these "trades", the following happens:

Sometimes, if the price of the buy order is below the market price the "trade" restarts after some time with a price slightly above. If not, the "trade" may break down almost completely for hours:

A single order worth a small fraction of a bitcoin can bring down their daily trade volume by several tens of millions. Note that in the beginning of the time period that the graphs in the following picture show, the volumes of other exchanges like Bitfinex increased due to a small price movement, whereas the volume of CoinsBank broke down because of a small order that was placed in one of their markets:

Conclusion 1: There is about zero actual trade happening on CoinsBank. The volumes reported to coinmarketcap.com are fake. If seems that CoinsBank is using a quite primitive automatic fake trades generating system which stops if forced into a too small price range or slightly above the market price.

What else awaits a customer of CoinsBank apart from illiquid markets? Hight fees!

And not only the trading fees are high. For example, at first sight the fee for BTC withdrawal looks like the fees of the other exchanges - but only if we don't check the number of 0's carefully: while a usual withdrawal fee at other exchanges is 0.0005 BTC (about 3$), here the minimal fee is 0.005 BTC (about 30$).

The fiat withdrawal fees are excessive as well, making it extremely expensive to withdraw anything deposited in BTC or fiat.

Conclusion 2: The business model of CoinsBank consists in luring in customers by reporting high fake volumes, pretending a liquid market and low prices for fiat to crypto trade. They extract money by extremely high fees, and likely, also by selling substantially above the market price.

Our advise concerning CoinsBank: stay away from it! They deceive by manipulating the volume, so how can one trust them? In addition, one can find lots of angry reviews on the internet of people who seem to have lost their money on CoinsBank or got it back from CoinsBank only after many difficulties.

In this case we see that a high ranking by volume on coinmarketcap.com is no guarantee that an exchange is legit.

Is coinmarketcap.com reliable?

This manipulation has also consequences on the price and volume calculation of coinmarketcap.com, which apparently includes the heavy fake volume and artificially low price feed of CoinsBank in the calculation of the price of bitcoin.

For example, if the price of bitcoin moves, there might be some actual orders and trade worth a few hundred dollars happening on CoinsBank (assuming that there are a few orders which are not by the CoinsBank system), but with the consequence of temporarily shutting down the automatic fake trade volume generator. So if the Bitcoin price moves, the "trade volume" of CoinsBank is likely to collapse, so that there is diminished volume increase on coinmarketcap.com.

Also, it's easy to manipulate. For example, a small fraction of a bitcoin is enough to stall the "trade" on CoinsBank, reducing the "trade volume" on CoinsBank by several ten's of millions, which would lead to a price increase of bitcoin on coinmarketcap.com as the artificially low prices of CoinsBank have less weight than usual.

It's not clear to us why coinmarketcap.com still lists CoinsBank and enables CoinsBank's scammy business model by ignoring this blatant abuse.

This raises the question whether coinmarketcap.com can be considered a reliable source of crypto prices and volumes. If they don't care about this obvious manipulation, how much more volume reported to and used by coinmarketcap.com is fake?