The Dark Side of Altcoins: Collusion, Price Manipulation, and the CEX Problem

The Dark Side of Altcoins: Collusion, Price Manipulation, and the CEX Problem

The cryptocurrency market, once a beacon of hope for financial innovation and transparency, is now facing a crisis of confidence that threatens its very foundation. As we move through 2025, it has become obvious that the altcoin sector is plagued by a toxic mix of collusion, price manipulation, and a glaring lack of transparency—especially on centralized exchanges (CEXs). The result is a market that feels increasingly rigged, where genuine price discovery is rare and retail investors are left holding the bag. I watched this industry evolve from its idealistic beginnings to its current state, I believe the time for self-reflection and reform is now, before the damage becomes irreversible.

The Mechanics of Manipulation in 2025

The most insidious problem in today’s altcoin market is the collusion between project teams and market makers. In theory, market makers are supposed to provide liquidity and stability, but in practice, many have become partners in manipulation. The process is disturbingly simple: project teams allocate large amounts of tokens to market makers at deep discounts before a token generation event (TGE). These market makers then orchestrate artificial price pumps at launch, creating the illusion of demand. Retail investors, seeing the price action, rush in—only to see the token’s value collapse as insiders dump their holdings.

The numbers in 2025 are staggering. In my own observation, most of the newly launch altcoin have lost 95% of their market cap. This is not a fluke or a reflection of poor project quality; it is a direct result of coordinated manipulation. The median altcoin launched in 2024-2025 is down by at around 70% from its TGE price. This pattern is so consistent that it has become a running joke among traders: “Buy the rumor, sell the TGE, and pray you’re not the last one out.”

Centralized Exchanges: The Silent Enablers

Centralized exchanges, which still control roughly more than half of the global crypto market cap, are at the heart of this crisis. Despite their dominance, most CEXs have done little to address the manipulation happening on their platforms. The incentives are clear: listing fees and trading volumes are lucrative, and exchanges benefit from the volatility and hype that manipulated launches generate.

Transparency is sorely lacking. While some exchanges have made token efforts to publish proof-of-reserves or improve listing standards, these measures are often superficial. The reality is that order books can be spoofed, wash trading is rampant, and the true nature of liquidity is hidden behind closed doors

This lack of transparency is fundamentally at odds with the ethos that drew so many to crypto in the first place. Bitcoin’s original promise was a system where trust was replaced by cryptographic proof and open ledgers. In 2025, the altcoin market feels more like a casino run by insiders than a transparent, decentralized financial system.

This is also reflected in the poll that I have conducted, 82.4% of the respondents think that CEX should held to a higher standard and they should lead by example to help the crypto industry.

The Human Cost: Confidence in Freefall

The impact of this dysfunction is not just financial—it is deeply personal. I have spoken with countless retail investors who entered the market in good faith, only to be burned by the same cycle of hype, manipulation, and collapse. Many have lost significant savings, not because they made reckless bets, but because the system was stacked against them from the start.

This erosion of trust is now quantifiable. According to a poll on X conducted by me, 63% of respondents believe that most altcoin prices are manipulated, and 37% have reduced or stopped investing in new token launches altogether.

The Absurdity of TGE Pricing

Perhaps the most glaring symptom of the current malaise is the absurdity of TGE pricing. In a rational market, the price of a new token should reflect its utility, adoption prospects, and the fundamentals of the project. Instead, TGE prices are set at levels designed to maximize returns for insiders and early backers, with little regard for long-term sustainability.

The result is a predictable crash. New tokens losing more than half its value within the first two weeks of trading become a norm. This is not just a problem for speculators; it undermines the entire process of capital formation and innovation in the crypto space. When every new launch seems like a trap for retail investors, genuine projects struggle to attract long-term supporters.

The Failure of Self-Regulation

For years, the crypto industry has argued that self-regulation is preferable to government intervention. But the events of 2024 and 2025 have shown that self-regulation is, at best, a myth. The industry’s inability—or unwillingness—to police itself has created a Wild West environment where bad actors thrive and honest participants are left disillusioned.

Just this morning, I warned my community that “the industry is eating itself alive,” and that unless meaningful reforms are enacted, both retail and institutional investors will continue to flee. My warning is echoed by community members who acknowledge that the status quo is unsustainable.

The Case for Reform: Transparency and Decentralization

So, what can be done to restore trust and legitimacy to the altcoin market? In my view, the answer lies in a renewed commitment to transparency, decentralization, and investor protection.

First, centralized exchanges must be held to higher standards. This means real-time publication of order flows, full disclosure of market maker relationships, and transparent token allocation data. Exchanges should be required to implement robust surveillance systems to detect and prevent manipulation, and to cooperate with independent audits. Some progress is being made—several exchanges have begun publishing more detailed transparency reports —but these efforts are still the exception rather than the rule.

Second, the industry must accelerate the shift toward decentralized exchanges (DEXs) and on-chain trading. While DEXs currently account for about 25% of trading volume, they offer a level of transparency and auditability that CEXs simply cannot match.

Every trade is recorded on a public blockchain, making it much harder to conceal manipulation. Uniswap v4 and dYdX have shown that it is possible to build liquid, efficient markets without relying on centralized intermediaries.

Based on a poll that I have done, 74.3% of the respondents think the industry must shift to DEX. I believe more and more people understand the importance of decentralization.

Third, token launches need to be fundamentally reformed. This could include longer vesting periods for insiders, transparent allocation disclosures, and mechanisms to ensure fair price discovery—such as open auctions or liquidity bootstrapping pools. Some projects are experimenting with “fair launches,” where tokens are distributed via community-driven mechanisms rather than private sales. While not a cure-all, these approaches represent a step in the right direction.

My Perspective: Why I Still Believe in Crypto

Despite the current malaise, I remain cautiously optimistic about the future of crypto. The technology that underpins digital assets—blockchain, smart contracts, decentralized finance—still has the potential to revolutionize the global financial system. But for that potential to be realized, the industry must confront its demons.

As an observer and participant in the crypto space, I have seen both the best and worst of what this market has to offer. I have witnessed the excitement of genuine innovation, the thrill of new possibilities, and the power of community-driven projects. But I have also seen the damage wrought by greed, collusion, and a lack of accountability.

The choice facing the industry is stark. It can continue down the current path, sacrificing trust and legitimacy for short-term gains. Or it can embrace reform, transparency, and a renewed commitment to the values that made crypto compelling in the first place.

Conclusion: The Road Ahead

The crisis of trust in the altcoin market is not an abstract problem; it is a clear and present danger to the future of digital assets. Collusion between project teams and market makers, abetted by the opacity of centralized exchanges, has created a market where manipulation is the norm and genuine price discovery is the exception. The result is a loss of confidence, a flight of capital, and a growing sense of disillusionment among investors.

But it does not have to be this way. By demanding greater transparency, embracing decentralization, and supporting thoughtful regulation, the industry can chart a new course. The road ahead will not be easy, and there will be resistance from those who benefit from the status quo. But the alternative—a market defined by manipulation and mistrust—is unacceptable.

I urge industry leaders, regulators, and investors to seize this moment. The future of digital assets depends on our willingness to confront hard truths, to demand better, and to build a market worthy of the ideals that inspired its creation. Only then can we restore trust, unlock innovation, and realize the promise of a truly decentralized financial system.

 

Source: https://www.securities.io/the-dark-side-of-altcoins-collusion-price-manipulation-and-the-cex-problem/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

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Crypto trading landscape: Insights from Bybit, CEX.IO, Huobi and GoodCrypto

Crypto trading landscape: Insights from Bybit, CEX.IO, Huobi and GoodCrypto

According to key CEX players, success in the crypto industry hinges on adapting to client needs, navigating regulatory changes and prioritizing mass crypto education.

The virtual roundtable, hosted by Cointelegraph on Twitter Spaces, brought together key team members from the largest centralized exchanges (CEXs), including Bybit, CEX.IO and Huobi, to discuss current industry challenges and trends in crypto trading. Speakers also included Maksim Hramadtsou, co-founder of GoodCrypto, an all-in-one trading and portfolio management app and member of the Cointelegraph Accelerator.

All speakers noted that the challenges they’re facing are the result of a complicated regulatory landscape, especially in some parts of the world such as the United States, a loss of user confidence due to FTX and other major industry events, liquidity drying up and the consequences of a bear market. They shared strategies for navigating through the uncertainty of the current state of the industry.

Becky Sarwate, head of communications at CEX.IO, doesn’t see increased regulation as an obstacle, as she believes regulation is the key to global crypto adoption. She emphasized the importance of educating users not only on how to use CEX but also on the basics of crypto and the processes behind crypto, without technical terms or detailed descriptions of use cases. “If we really want to welcome newcomers to space, we need to limit the jargon and techno-speak to show the possibilities that really exist in space,” Sarwate said. “In our case, we teach people through the university within our platform, our leadership and values, which we’ve been nurturing throughout CEX.IO’s history.”

Edward Chen, general manager of the Asset and Commercial Center at Huobi, noted the lack of use cases related to the application layer. “Everyone is talking about infrastructure, but not the application layer, where we’ve only seen a few projects. There’s still a lot to be done there from the traditional world, such as crypto and fiat off-ramp solutions, so we provide a bridge between these scenarios to support trading demand,” he said. Among Huobi’s strategies to maintain its position in the market, Chen cites partnerships with traditional finance (TradFi) players, a strong research team to detect market trends ahead of competitors and risk management tools for users.

Bybit takes a different approach, as its adviser, Anndy Lian, pointed out with the example of its recent collaboration with Oracle Red Bull Racing: “Together we launched an NFT collection ‘Velocity Pass’ almost three weeks ago, which has sold quite well despite the fact that the NFT market is not performing strongly. I think whatever the market, bull or bear, as long as you have a good product, you will always be on the right track.” Lian said Bybit has managed to stay ahead of the competition by correctly anticipating the regulatory framework, working closely with various communities and stakeholders at the government and business levels, and constantly supporting customers, including providing artificial intelligence (AI) services. “In the longer term, it turns into a trust when done on a daily basis,” he said.

Maksim Hramadtsou of GoodCrypto noted the shift in traders’ preferences, which are now more toward decentralized exchanges (DEXs). “It’s not only because of FTX but also liquidity, which is not having the best times. Maybe over time, they [users] will change their minds because CEXs are faster, have better liquidity and lower fees. But we try to be with our customers where they are now.” Hramadtsou mentioned that GoodCrypto supports over 35 exchanges and offers tools that are not native to these exchanges but are commonly used by many traders, especially those from TradFi. These tools include trading stops, dollar-cost averaging (DCA) and grid trading bots, as well as the ability to activate any order via webhooks. “So for those who use multiple platforms at the same time, which is absolutely standard practice and creates interesting dynamics in the market, GoodCrypto is a good option as traders can easily switch between exchanges,” said Hramadtsou.

In terms of current trends that will remain and shape the future of the industry, Sarwate highlighted the growing synchronicity between TradFi and decentralized finance (DeFi), which will continue, while Hramadtsou predicted the growth of DEXs built on layer 2. Lian added: “I hope to see more tokenized products in the space, such as securities, commodities, derivatives or equities because it can bring more traditional players into crypto and therefore bring competitiveness and a variety of products. It can take us to new heights.”

 

Source: https://cointelegraph.com/news/crypto-trading-landscape-insights-from-bybit-cexio-huobi-and-goodcrypto

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

j j j