A Twitter user has found that someone is taking advantage of South Korean cryptocurrency exchange Bithumb.

5/ In conclusion, some smart trader/s are milking $90K out of Bithumb every day. Corollary: Bithumb massive volume increased should not be considered a bullish signal.

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— Alex Krüger 🇦🇷 (@Crypto_Macro) September 2, 2018

One billion won

The exchange has had an offer running since the 25th of August – 120% payback of trading fees every day, up to a limit of one billion won ($899,490).

Source: Bithumb

Trading fees on Bithumb equal 0.15 percent of the value of a trade, so a user gets 0.18 percent of the trade back with this promotion deal. If that user was to trade with themselves, they would get 0.36 percent.

But how is that possible?

This is very possible by way of ‘wash trading’. Illegal in many places, this is the practice of a party (or colluding parties) creating artificial activity in a market by buying and selling the same stock to itself.

Twitter user Alex Krüger made the calculations: “To collect the full KRW 1 billion rebate a wash trader must thus trade KRW 278 billion. That is USD 250 million in daily fake volume.”

Twitter: @btcfundmanager

As you can see from the above chart, a spike in Bitcoin trades appears at exactly 11:00 Korean Standard Time every day. They all equal around 30,000 BTC, which is approximately $217 million at the current price.

So basically, someone is taking advantage of the special offer to make around $90,000 a day.

4/ First Come First Served, so it ALL trades at 11AM.

Notice how 31K bitcoin are traded at exactly 11AM. That represents KRW 252 billion. The remainder KRW 26 billion are traded in other coins.https://t.co/EhNHaUihdGSuggested articles

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— Alex Krüger 🇦🇷 (@Crypto_Macro) September 2, 2018

Fake volume is a worrying issue in the cryptocurrency world. In March, one trader discovered that OKEx, one of the biggest venues in the world, could be overstating its numbers by as much as 92.9 percent. As a response to this, price tracking website coinmarketcap.com recently removed the minimum $50,000 daily volume that exchanges had required to appear there.

Gangnam style

Bithumb is the second most popular cryptocurrency exchange in South Korea, trading $391 million in cryptocurrency transactions in the last 24 hours according to coinmarketcap.com.

The exchange began accepting new customers again on the 30th of August; it had stopped on the 31st of July because it had not been able to renew its contract with Nonghyup Bank, according to Yonhap News.

South Korean cryptocurrency exchanges must maintain bank accounts according to local law, and Nonghyup had security concerns following the theft of $30.1 million in cryptocurrency from Bithumb in June. However, the exchange undertook to repay victims out of its own pocket and it passed a tax audit in June.

Bithumb, which is owned by publicly traded company BTCKorea, reported earlier this year that its profits had grown by a factor of 171 over 2017. It made millions of dollars in profit this year too, despite the hack.

This is testament to the popularity of cryptocurrency in South Korea. In fact, Bithumb recently opened up a new office in the fashionable district of Gangnam, and is planning to open a branch in London too.

Bithumb’s customer center moved to a larger facility located in Gangnam!

We have counselors who can speak English, Chinese and Japanese. pic.twitter.com/7YKhHuiShp

— Bithumb (@BithumbOfficial) March 19, 2018