This trader nicknamed "Spoofy" the title was awarded for his efforts to "spoof / deceive" the market, especially on Bitfinex. What is spoofing? According to Dodd-Frank, spoofing practices are:
"Bidding or offering with the intent to cancel the bid or offer before execution"In other words, the spoofer makes a big buy just below the buy order, or a large sell order just above the other sell order. The idea is to make traders think that someone with a very thick wallet is getting ready to buy or sell, in the hope of moving the market price.
For example, if a trader sees a 2000 Bitcoin sell order, they may panic immediately because the whale will drive the price. The conclusion is this: If the price approaches the spoofer order, he immediately cancels it. Spoofing is actually illegal, but since the Bitcoin market is largely unregulated, this is very common. Unusual in this case is the Spoofy has a lot of capital. He usually puts an order close to $ 60m.
Even more unusual is that most Spoofy activity is performed on one exchange:
Bitfinex. This exchange got an early warning this spring when Wells Fargo broke off their banking relationship. As a result, it is almost impossible to deposit a flat on Bitfinex without going through an intermediary.
Another Tactic
Spoofy has a lot of weapons in his warehouse, spoofing and wash trading. As BitCrypto'ed pointed out in a recent blog post:
"Spoofy keeps the price up when he wants to ride, and Spoofy keeps the price down when he wants it down, of course, he gets the benefit of it ... no matter the USD, or BTC to do it, And freely on Bitfinex."The BitCrypto'ed blog also explains the wash trade by Spoofy, when he trades with himself by selling on his own buy order or vice versa. Wash trade at high volumes can lead to instability in the buy or sell, as other traders receive high trading volume impacts.
When Bitfinex announced its plan to distribute Bitcoin Cash, it was originally planned to be distributed to short positions holders. Soon after the announcement, a single trader sold tens of thousands of Bitcoins at a time. The possibility of this trader is Spoofy himself, plan to get as much Bitcoin Cash as possible.
A large number of Bitfinex shorts also leads many to believe that epic black shorts are imminent, and many Bitcoin merchants buy coins in the hope of this. Suddenly, he "claims" all his own shorts, closing it with his own Bitcoin. The number of shorts goes down drastically without affecting the price at all.
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