Source: Cointelegraph Original: "{title}"
Opinion by MEXC Chief Operating Officer Tracy Jin
Market manipulation is everywhere, yet it is also elusive. It is an invisible threat that affects both cryptocurrency and traditional markets, costing ordinary traders dearly. Sometimes, manipulative behavior is obvious—illiquid tokens are pumped up high and then sold off just as quickly—but often, manipulation is more subtle and harder to detect.
What is more concerning is that these schemes are no longer the domain of rogue whales or amateur pump groups. Increasingly, there are signs that organized, well-funded networks are coordinating activities across centralized exchanges, derivatives platforms, and on-chain ecosystems. As these participants become more sophisticated, their threat to market integrity multiplies.
Market manipulation is as old as the market itself. In ancient Greece, a philosopher named Thales of Miletus used his understanding of weather patterns to predict the olive harvest season, quietly renting all the olive presses in the area at low prices before the season began. Then, when the harvest season arrived and demand for the presses surged, he rented them out at high prices, profiting from the difference.
A more recent historical example, albeit from 300 years ago, is the South Sea Bubble, where company directors sold off shares at the peak of stock prices, leaving ordinary investors with nothing. Or the Dutch Tulip Bubble from a century ago.
Since the first exchanges went live around 2011, market manipulation has existed in the cryptocurrency space. Those who were around may remember a notorious trader named Fontas who orchestrated a pump-and-dump scheme on the BTC-E exchange. Or they might recall the Bear Whale, whose 30,000 BTC sell wall caused the market to crash when the total daily trading volume of all cryptocurrencies was less than $30 million. While technically not market manipulation, it demonstrated how easily one person could leverage the cryptocurrency market.
Today, cryptocurrency has become a multi-trillion-dollar asset class, making it nearly impossible to manipulate large-cap assets single-handedly. However, when a group of malicious traders bands together, it is still possible to shake the market—organized insiders are doing just that.
The era when a single whale could topple a BTC sell wall weeks later is long gone. Today, cryptocurrency liquidity has greatly increased but has also become more fragmented. This provides opportunities for aggressive traders who hunt in packs, steering the market in their favor. They often coordinate activities through private Telegram groups, targeting markets where they can exert the most influence. This trend highlights how major players are increasingly involved in market manipulation schemes, introducing new risks to the cryptocurrency industry.
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In February of this year, analyst James CryptoGuru warned of the massive manipulation risks associated with spot Bitcoin ETFs. He explained that these instruments could exert downward pressure on Bitcoin prices—especially when traditional financial markets are closed. This strategy could trigger liquidations among leveraged traders and create temporary imbalances, allowing big players to accumulate BTC and ETH at discounted prices.
Due to the high interconnectivity of cryptocurrencies (including on-chain and off-chain currencies), the ripple effects of successful manipulation can extend far and wide. If trading pairs provided to other markets via APIs are disrupted on a centralized exchange, arbitrage opportunities can arise elsewhere (including in the perps market). Thus, an attack can be initiated on one exchange while profiting on another, making it difficult to catch the culprits.
The integrity of the cryptocurrency market faces greater risks. Coordinated groups have substantial funding, technical tools, and cross-platform access to execute and cover up complex operations. Alarmingly, since it is nearly impossible to prevent market manipulation, most exchanges are still designed to be passive. Therefore, attackers are likely to maintain an advantage, even as their window of opportunity to operate freely narrows.
Just as Thales of Miletus profiting from the olive season did not violate any rules, many actions that constitute cryptocurrency manipulation are also not illegal. When a large fund begins buying a certain token through one of their public wallets to attract attention, is that manipulation? Or when market makers actively raise a token's price at the request of a project rather than simply matching buy and sell spreads, is that manipulation? Many factors can influence the market, but most are not illegal—at least not yet.
The ethical standards for influencers, market makers, trading firms, and other large participants can be debated for a long time, while other situations do not require such nuance. The last time someone checked, using thousands of exchange accounts composed of dozens of users to inflate the price of an asset was blatant manipulation. With the help of increasingly sophisticated AI tools, exchanges are fighting back.
The era when a single user could create chaos in the market may be over. However, in a multi-chain, multi-exchange era, this threat has not disappeared; it has multiplied. Therefore, exchanges can only play a game of "whack-a-mole," trying to detect suspicious behavior initiated by hundreds or thousands of accounts simultaneously.
Fortunately, exchanges do not have to fight alone, and successful collaboration cases prove this. In early 2025, Bybit was hacked, and other platforms intervened to lend ETH and help it meet its withdrawal obligations—a rare and powerful signal of unity in the face of crisis.
As well-funded, organized groups continue to test the system, one thing has become clear: while market manipulation may be relatively easy, doing so without being detected is becoming increasingly difficult. Collective vigilance, data sharing, and early detection are becoming the most effective tools to protect the integrity of the cryptocurrency trading ecosystem.
Author: Tracy Jin, MEXC Chief Operating Officer: Tracy Jin, MEXC Chief Operating Officer.
This article is for general information only and is not intended and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed in this article are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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