Major Chinese BTC Exchange OKCoin Facing Allegations

OKCoin, touted as the second biggest Chinese exchange, second only to BTC China in volume, is being accused of trading with fake data. Following the ruling that Chinese banks and payment services may not cooperate with Bitcoin exchanges, Bitcoin prices plummeted, except for OKCoin, which remained high (one might say suspiciously so).

And one user did say so, going by the pseudonym Shi Diaomao. Shi claimed that OKCoin was faking its trading volume data to boost prices and activity. The user called one two hour period in particular into question, as the site claimed that over 30,000 BTC were exchanged during that time. Comparing that to a tally of the actual buy and sell orders, however, we find that the real numbers could be drastically lower. Shi quickly contacted customer service for the site, but they failed to give a good reason for the discrepancy, and fell silent.

Many others have confirmed the shady looking numbers, including known Bitcoin Millionaire, Li Xiaolai. The company’s CEO, Xu Mingxing, issued a statement saying that the difference in number could be attributed to the fact that high volume traders can trade directly through the API, and not through the web interface. Zhao Letian, another BTC celebrity over there, had this to say on the matter (quote taken from CoinDesk):

“The two graphs show the market depth of BTC China and OKCoin. Despite the great difference of market depths, their trading volumes are very close, which can only mean that one is cheating. The reason that I stopped going to OKCoin is that it is very hard for me to buy more than 1000 BTC [at one time].”

This incident is causing others look more closely at OKCoin’s trading, and calls more into question. Many users are suspicious of its LTC market now too. Hopefully further comment or  resolution will come about for this interesting incident soon.