Manipulations in cryptocurrency exchanges are a common phenomenon due to the **relatively unregulated nature** of these markets, and **low liquidity** in many projects, and **ease of price manipulation** through organized techniques. Here are the most common types of manipulations and how they occur:
### 1. **Wash Trading**
- **What Happens**:
Entities (such as the project itself or manipulators) buy and sell the currency to themselves through multiple accounts to create the illusion of **high trading volume** and attract new investors.
- **Objective**:
- To raise the currency's ranking on platforms like **CoinMarketCap**.
- To mislead investors into believing there is significant demand for the currency.
- **Example**:
In 2023, reports revealed that some fake exchanges (like **Binance** at certain times) allowed wash trading of up to 70% of the reported trading volume.
### 2. **Pump and Dump**
- **What Happens**:
- An organized group (such as Telegram channels or fake groups) buys large quantities of cheap and low liquidity currency.
- They spread rumors or false news to push others to buy, raising the price.
- The group suddenly sells everything they have, causing the price to collapse.
- **Victims**:
Small investors who enter at the peak and lose most of their money.
3. **Spoofing**
- **What Happens**:
Placing **fake buy or sell orders** at unrealistic prices to deceive algorithms and traders.