Leaked documents detail how Coinsquare used automated tools to inflate exchange volume: report

Vice's Motherboard published an article Friday that outlined how Canadian cryptocurrency exchange Coinsquare has allegedly used automated trading software to inflate its trading volumes.

According to the report, Motherboard obtained leaked emails, Slack messages and other files. Based on the materials gathered, Coinsquare appeared buying and selling cryptocurrencies between accounts it controlled, an activity known as wash trading. The point of wash trading – which is illegal under U.S. securities law – is to artificially boost trading volumes to make them appear bigger to other traders.


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The materials also outlined the degree to which Coinsquare employees were said to be uncomfortable with the arrangement. As reporter Joseph Cox noted: "Several of the leaked documents specifically show Coinsquare CEO Cole Diamond pushing for the company to practice wash trading, and employees of the company being uncomfortable with the practice. The documents allege that Coinsquare performed wash trading at least during 2018 and 2019."

New guidance from Canadian security regulators earlier this year showed that many of the country's crypto exchanges may fall under national securities laws. And as Cox noted, the Ontario Securities Act includes language restricting any action "results in or contributes to a misleading appearance of trading activity in, or an artificial price for, a security, derivative or underlying interest of a derivative."

Coinsquare did not respond to a request for comment before press time.

About Author

Saniya More (pronounced: Saan-ya Mo-ray) is a quadrilingual journalist at The Block. She got her master’s degree from the Columbia University Graduate School of Journalism and did her undergraduate degree at the S.I. Newhouse School of Public Communications, Syracuse University. Her work has appeared in CBS News, Bangkok Post, Thai Enquirer, Globalists, Byline Times and other publications. When she’s not chasing a story, you will most likely find her biking, tweeting, taking photos or creating Spotify playlists for every occasion.