Opinion by: Tracy Jin, Chief Operating Officer, MEXC
Market manipulation is everywhere and yet nowhere to be seen. It is an invisible threat affecting crypto and traditional markets, leaving ordinary traders counting the costs. Sometimes, manipulation is obvious — illiquid tokens being pumped high before being dumped just as fast — but often, it’s subtler and more challenging to detect.
What’s more concerning is that these schemes are no longer the domain of rogue whales or amateur pump groups. Signs increasingly point to highly organized, well-funded networks coordinating activities across centralized exchanges, derivatives platforms, and onchain ecosystems. As these actors grow in sophistication, their threat to market integrity expands exponentially.
A tale as old as time
Market manipulation is as old as markets themselves. In ancient Greece, a philosopher named Thales of Miletus used his knowledge of weather patterns to predict a bumper olive harvest, quietly leasing all the olive presses in the region at a low rate before the season started. Then, when the harvest came in, and demand for presses spiked, he rented them out at inflated prices, pocketing the difference.
For a more recent historical example, albeit still 300 years in the past, see the South Sea Company bubble in which company directors dumped shares at peak prices, leaving regular investors rekt. Or the Dutch tulip bubble of a century earlier.
Market manipulation has existed in crypto since the first exchanges came onstream around 2011. Those who were around back then may recall the pump-and-dump schemes on the BTC-E exchange orchestrated by a notorious trader called Fontas. Or they might remember Bear Whale, whose 30,000 BTC sell wall crashed the market at a time when total daily trading volume was less than $30 million — for all of crypto combined. While not technically market manipulation, it showed how easily one individual could move the crypto market.
Fast forward to today, and crypto is a multi-trillion dollar asset class, rendering manipulation of large-cap assets virtually impossible for solitary whales. But when a group of nefarious traders team up, it’s still possible to move markets — and well-organized insiders are doing just that.
Manipulators make their move
The days when a single whale could set a BTC sell wall that took weeks to topple are long gone. While crypto is magnitudes more liquid these days, it’s also much more fragmented. This presents opportunities to enterprising traders who hunt in packs to move markets to their advantage. Often working through private Telegram groups, people coordinate activities targeting markets where they can have the most effect. The trend highlights the growing participation of major players in market manipulation schemes, presenting a new level of risk for the crypto industry.
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In February, analyst James CryptoGuru warned of large-scale manipulation risks involving spot Bitcoin ETFs. He explained that these instruments could put downward pressure on Bitcoin’s price — particularly when traditional financial markets are closed. Such a strategy could trigger liquidations among leveraged traders and create temporary imbalances, allowing large players to accumulate BTC and ETH at discounted prices.
Because crypto — both onchain and on-exchange — is highly interconnected, the ripple effects of a successful manipulation attempt extend far and wide. If a trading pair queried by APIs for feeding other markets is knocked out of sync on one centralized exchange, it can generate arbitrage opportunities elsewhere, including on perps markets. As a result, an attack can be initiated on one exchange, and the profits claimed on another, making it extremely hard to catch the culprits.
The integrity of the cryptocurrency market faces increased risk. Coordinated groups have deep pockets, technical tools, and cross-platform access to execute and mask complex operations. The troubling part is that most exchanges remain reactive by design since it’s virtually impossible to prevent market manipulation. As a result, attackers have a high chance of retaining the advantage, even if the window in which they’re free to run amok is becoming increasingly smaller.
Not all manipulators break the rules
Just as Thales of Miletus wasn’t breaking the rules when he profited off olive season, much of what constitutes crypto manipulation isn’t illegal. When a large fund starts buying a particular token through one of their public wallets to attract attention — is that manipulation? Or when market makers go beyond simply matching bid-ask spreads to actively propping up a token’s price at the request of a project? Many things move markets, but mostly things that aren’t illegal — at least not now.
While the moral code governing influencers, market makers, trading firms, and other players of serious size can be debated at length, other cases require less nuance. The last time anyone checked, using thousands of exchange accounts staffed by dozens of users to inflate a particular asset is blatant manipulation. Exchanges, aided by increasingly sophisticated AI-powered tooling, are fighting back.
The days when one user would cause mayhem on the markets may be over. The threat hasn’t, however, dissipated in the multichain, multi-exchange era — it’s multiplied. As a result, exchanges are now locked into a game of whack-a-mole, trying to detect suspicious behavior initiated by hundreds or thousands of accounts simultaneously.
Thankfully, exchanges don’t have to do it alone, as successful collaboration cases show. When Bybit was hacked in early 2025, other platforms stepped in to lend ETH and help it meet its withdrawal obligations — a rare but powerful sign of solidarity in the face of crisis.
As well-funded, highly organized groups continue to test the system, one thing becomes clear: manipulating the market may be relatively easy — but doing so without being detected is increasingly difficult. Collective vigilance, data sharing, and early detection are becoming the most effective tools in safeguarding the integrity of the crypto trading ecosystem.
Opinion by: Tracy Jin, Chief Operating Officer, MEXC.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
