Bitfinex deploys market abuse tool to get rid of wash trading and layering

BBitfinex, a digital asset trading platform, has deployed a proprietary surveillance tool to combat market abuse and help promote orderly trading on the exchange. Named Shimmer — a term also used to describe a bee’s way of defending its hive — the market alert and reporting tool will identify and investigate possible manipulative behaviors and suspicious trading practices on the exchange, improving market integrity and visibility.

Shimmer will help combat abusive practices in the market such as wash trading, where a trader buys and sells an instrument with the intent of misleading the market, and layering, where a trader uses non-bona fide orders to mislead others regarding actual supply or demand in the market. Bitfinex’s team of specialists will be alerted to incidences of potential improper trading activity on the platform via email summaries of suspicious trading patterns across all trading pairs listed on the exchange, including futures and margin funding products.

“Comprehensive market and trade surveillance capabilities are integral to operating a leading cryptocurrency exchange,” said Paolo Ardoino, CTO at Bitfinex in a statement. “To meet the complex needs of an evolving digital asset class and to protect our sophisticated participants, Bitfinex has chosen to develop its own state-of-the-art surveillance system. This will help to assure that potentially manipulative practices are rooted out and suspicious behavior detected.”

It’s designed to scale with the size of the exchange, and uses the Rust programming language for high-speed processing of voluminous trade and order data. “This tool is especially relevant for our futures and margin funding products,” said Ardoino in a statement.

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