Crypto markets are often accused of being uniquely vulnerable to manipulation, but one industry executive argues the problem extends far beyond digital assets. Speaking during an interview wi
Crypto markets are often accused of being uniquely vulnerable to manipulation, but one industry executive argues the problem extends far beyond digital assets.
Speaking during an interview with host Sujal Jethwani published on June 11, DWF Labs managing partner Andrei Grachev said both crypto and traditional finance face similar challenges when it comes to market abuse.
The difference, he argued, is that crypto's smaller size and higher volatility make unusual price moves far more visible to the public.
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Grachev said many events that appear to be manipulation in crypto are sometimes simply a consequence of limited liquidity.
"I think crypto was and is not that big comparing to traditional markets," Grachev said. "And definitely it's much more volatile and many things they look like manipulation, even if they are not manipulation."
He explained that smaller crypto assets can have only a few thousand dollars in available liquidity, making it easier for individual traders to trigger sharp price swings.
"Some random buyer, some random seller, could just eliminate all the order book of this coin," Grachev said.
He acknowledged that crypto has also attracted bad actors over the years, including those involved in wash trading and artificial price inflation schemes.
However, he noted that regulators have increasingly cracked down on such behavior through fines and criminal prosecutions.
Grachev argued that traditional financial markets experience many of the same issues, despite often being viewed as safer and more regulated.
"We also trade on traditional markets and my partners and I used to trade on traditional markets," he said.
As an example, Grachev pointed to activity in India's options market, where he said certain firms profited from trades that ultimately destabilized broader markets.
"There are just a few companies that went long and sold a lot of short options and then closed their longs and collapsed the market but made a fortune," Grachev said. "This traditional market. It's nothing related to crypto space."
According to Grachev, market manipulation is not unique to any single asset class.
"I cannot say that crypto is all manipulation, traditional is all clean," he said. "It has both."
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