In traditional financial markets, exchanges are subject to strict laws that prevent price manipulation.

However, in the world of cryptocurrencies, where legal regulation is still fragile or absent in some areas, platforms themselves emerge as one of the most dangerous sources of manipulation.

Forms of price manipulation from within platforms:

1. Wash Trading:

The platform creates fake buy and sell orders among its own accounts to artificially inflate trading volume.

The goal: to mislead traders into believing there is significant activity on the token to attract them.

2. Price Spoofing:

The internal trading system places large buy/sell orders that are not intended to be executed.

When traders rush to buy or sell, orders are immediately pulled after the price direction changes.

3. Insider Trading:

Employees at the platform receive insider information (such as new listings), so they buy the token before the announcement and profit from the "hype" created by the listing.

4. Liquidation Hunting:

The platform "manipulates" the price slightly to trigger stop-loss levels or liquidate high-leverage positions, creating artificial buying or selling pressure.

5. Sudden trading shutdown or withdrawal freeze:

In cases of severe volatility, some platforms may halt trading under the pretext of "protection from fluctuations," while the action serves as an opportunity for platform owners to liquidate their positions or buy at low prices.

Real-life examples:

Bitfinex (2017): It faced charges of market manipulation by coordinating with Tether to inject unsupported liquidity that affected Bitcoin's price.

FTX (2022):

After its bankruptcy, manipulative practices behind the scenes were revealed, where customer funds were used to support its own FTT token and inflate its price.

How do you protect yourself?

1. Choose reliable platforms with a good regulatory track record (Binance, Coinbase, Kraken...).

2. Watch for illogical movements in price or volume.

3. Avoid using high leverage, as it is the most susceptible to targeting.

4. Split your trading across multiple platforms and keep a portion of your capital out of the market.

5. Follow the news and investigations, as hidden information often emerges too late.

✍️ Internal manipulation on platforms is a real risk that should not be ignored.

Being aware of this and checking the behavior of the platform you are using is part of a smart trader's survival strategy.

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