For $15K, He'll Fake Your Exchange Volume

"These operators usually go around claiming that they can do market-making for token projects and inflate trading volume for a fee. This practice is also known as wash trading and is illegal," Ong said.

Listing on a small exchange costs $8,000; a month of supporting fake trading volumes via algorithms imitating normal market activities will run you $6,000.

Neither exchange responded to CoinDesk's requests for comment by press time.

Alameda analyzed the order books and trading history of 48 crypto exchanges worldwide and found that on 14 of them, genuine trading volume might well be zero.

After a token is listed on two exchanges and shows some trading activity provided by bots - the volume can be less than $100,000 a day per exchange - there is a chance to get it listed on CoinMarketCap.

Part of the pressure, Ong added, comes from exchanges, which require a minimum trading volume and de-list thinly traded tokens.

Sometimes a client decides to turn off the bot and the volume plunges to zero, if nobody but Gotbit's bot is trading the token.

The volume bot's orders are not supposed to be executed and settled, just create an illusion of trading.

In theory, some real holder who purchased tokens during an ICO can come to the exchange and take the orders - in this case, Gotbit would end up with a heavy bag of illiquid coins.

Gotbit's market-making business is winding down, and the team is switching to other services, the most popular of which is initial exchange offerings, a type of ICO that is conducted on an exchange.