Offshore exchanges and their likely impact on cryptocurrency market volatility

Hello dear friends and followers, back with you all to continue sharing updated information about the happenings within the cryptocurrency market, it turns out that reading information about the recent Bitcoin price crash, I came across a very interesting analysis about the impact of offshore exchanges on Bitcoin volatility.

It turns out that one of the most substantial value propositions of Bitcoin is that no one can create more of it apart from its fixed supply, an element that is common knowledge and has been the main strength of Bitcoin with respect to the traditional monetary system.

However, it seems that things are not working as we believe, this if we take into consideration the statements made by an important executive of a cryptocurrency exchange, who assured that some exchanges can create and sell Bitcoin that is only in their system, not in the blockchain, and with this practice manipulate the market.

This is part of a statement made by Serhii Zhdanov, who today serves as CEO of cryptocurrency exchange Exmo, who shared his belief that market manipulation is still prevalent in the digital asset space and gave an example of how it can happen.

According to Serhii Zhdanov, if someone wanted to dump the market, it is possible to go to an offshore exchange that does not go through financial audits and ask for USD 100 million in BTC and use USDT 10 million as collateral.

To exemplify his hypothesis, Serhii Zhdanov said the following "The exchange only adds these funds to the account, creating these Bitcoins only in its system. They do not exist on the Bitcoin blockchain. The client or internal market making team then sells these Bitcoins equivalent to USD 100 million, plummeting the price of Bitcoin on all exchanges".

From my perspective, this type of situation must be avoided at all costs, otherwise the cryptocurrency market will succumb, as is the case with the traditional money market.

Cointelegraph. Can exchanges create imaginary Bitcoin to dump price? Crypto platform exec answers. Link

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