Bitfinex Deploys Proprietary Surveillance Tool Against Wash Trading and Layering

Bitfinex has deployed a proprietary surveillance tool to combat market abuse and help promote orderly trading on the exchange. Dubbed Shimmer, it will identify and investigate possible manipulative behaviours and suspicious trading practices on the venue, and was designed to operate seamlessly with Hive, Bitfinex’s distributed, multi-threaded and multi-process matching engine.

In addition, Shimmer will help combat 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.

Paolo Ardoino, Chief Technology Officer at Bitfinex, commented: “Comprehensive market and trade surveillance capabilities are integral to operating a leading cryptocurrency exchange. 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. This tool is especially relevant for our futures and margin funding products. We chose to use the Rust programming language for its execution speed and programming safety. The Rust package manager and ecosystem allowed us to be up and running with a workable market detection tool in a short time frame.”

Bitfinex leverages its position as a one-stop-shop for crypto trading offering a variety of services, including margin trading with up to 5x leverage and access to a perpetual swap contract offering 100x leverage through its affiliate, iFinex Financial Technologies Limited. The operator also targets institutional investors to trade in the cryptocurrency space.

Earlier this month, Bitfinex expanded its partnership with Market Synergy to connect brokers, hedge funds and professional traders to its trading platform with the launch of a cloud-based VPS (Virtual Private Server) after having gone live with an institutional caliber connectivity offering in January 2019. The solution enables firms to take a FIX feed or ISP link to Bitfinex’s digital asset gateway. In addition to the cloud-based VPS solution and the institutional connectivity offering, Market Synergy also offers colocation services to any Bitfinex institutional client.