The 5 Risks of Data Manipulation by High-Yield Crypto Platforms

In an industry where transparency and decentralization are touted as fundamental principles, some high-yield crypto platforms have taken a divergent path — resorting to data manipulation to lure in investors seeking astronomical returns. These platforms often artificially inflate their performance metrics, creating a facade of robust activity and profitability. In this article, we dive into the five main risks associated with data manipulation on these platforms and explain how these practices can mislead investors.

1. Fake Trading Volumes: Wash Trading and Trading Bots

What Is Wash Trading?

Wash trading involves a series of simulated transactions where the same entity (or closely related entities) essentially trades with itself. The goal is to create an illusion of high trading volume and liquidity that does not reflect genuine market activity. By engaging in wash trading, platforms can display impressive trading figures that attract investors looking for signs of a thriving market.

The Role of Trading Bots

Beyond orchestrated wash trades, many platforms deploy automated trading bots. These bots execute orders at high frequencies, generating a continuous stream of…