The cryptocurrency Exchanges were accused of ‘fake reported volume’ which was a demerit for the entire crypto-markets. However, the fake reported volume data did not have any significant impact on price. This is because ‘wash trading’ is used to increase the apparent volume of Exchanges only.
However, it does create an illusion of a lot of value being traded on the Exchanges and the cryptocurrencies. According to research by Florent Moulin, published on the Messari site, Ripple might be using the fake reported data to mislead the investors into something bigger.
The report compared the Q1 financial report submitted by Ripple with their estimates. The most important highlight from their report was,
They [Ripple] may mislead investors because key information regarding sales and estimated trading volumes significantly understate the pace of selling pressure from Ripple and its founders and affiliates. We find that XRP’s circulating supply inflated by 11.5% in the past six months vs. the 4.5% implied by its API.
According to Ripple, it made $169 million from these combined sales, with two-thirds of that sold on defined exchanges and the rest coming from direct institutional sales in Q1 2019.
we believe that more than 75% (75 million) of the current XRP outstanding supply (units identifiable on-chain) is currently managed by Ripple and its founders and affiliates. Circulating supply data is sourced from known on-chain addresses.The value presented is our best estimate for the Maximum circulating supply of XRP.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com