The Vice Motherboard article looked at how the Canadian stock exchange Coinsquare allegedly used automated trading software to inflate its trading volumes.
According to the report, Motherboard received leaked emails, slack messages and other files.
Based on the material collected, Coinsquare appears to have bought and sold cryptocurrency between accounts it controlled, which is known as wash trading.
The purpose of this illegal practice is to artificially inflate trade volumes to make them look higher to other traders.
The materials also emphasize how uncomfortable this situation was for the employees of the stock exchange. Reporter Joseph Cox noted:
Several leaked documents show specifically how Coinsquare CEO Cole Diamond insists on wash trading and how uncomfortable it is for employees. The documents claim that Coinsquare performed wash trading at least in 2018 and 2019.
New guidance from Canadian securities regulators earlier this year shows that many of the country’s major cryptocurrencies can be regulated under national securities laws.
As Cox noted, Ontario’s securities law includes language prohibiting any action that ‘contributes to the misleading nature of the business …’