Mysterious Trader “Spoofy” Exploiting Bitfinex Exchange Through Wash Trading And Spoofing


Illegal trading practices, like “wash trading and spoofing,” are allegedly being used on Bitfinex cryptocurrency exchange to manipulate Bitcoin’s price, Coin Telegraph reported.

The illicit trader has been nicknamed “Spoofy,” for his actions spoofing a large buy order or a large sell order just above other orders then canceling at the last minute to manipulate the market and swing it up or down in his or her favor.

Spoofy regularly places orders of $60 million dollars plus and cancels them.

According to the Dodd-Frank Act the Wall Street Reform and Consumer Protection Act spoofing is illegal and is the practice of:

“Bidding or offering with the intent to cancel the bid or offer before execution”

As BitCrypto’ed points out in a recent Medium blog post, Spoofy seems to have impunity by Bitifinex:

“Spoofy makes the price go up when he wants it to go up, and Spoofy makes the price go down when he wants it to go down, and he’s got the coin… both USD, and Bitcoin, of course, to pull it off, and with impunity on Bitfinex,” Bitcrypto’ed wrote.

The BitCrypto’ed blog further describes another method deployed by Spoofy called wash trades, which is essentially trading with yourself by either selling into your own buy orders or vice versa.

Wash trading at high volumes can induce a frenzy in any market of buying or selling, as other traders react to the influx of high trading volume.

Spoofy can allegedly execute wash trades at very low cost, about $1,000 per million dollars of volume.

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