Phemex is steadily growing thanks to the hard work of our team and business partners. The recent BTC/USD volume surge raised some concerns amongst our community. I feel we have a responsibility to explain the situation in detail.
First off, Phemex will never, ever, fake any trading volumes. As you may have noticed, we recently delivered multiple new trading pairs, with GOLD/USD going live yesterday. Our mobile apps have also launched in this same period. In addition, our main trading webpage has also just undergone a major UX/UI upgrade. Developing world-class trading products will always be our primary focus and as such, our number of registered clients has continued to grow consistently (see below). We simply have no incentive nor time to be faking trading volumes.
So what exactly happened then? The answer is that Phemex’s trading rate limit is quite simple at the moment: 500 requests/min. Any user is able to connect to us through public APIs. This rate limit benefits API users, especially high-frequency trading (HFT) clients. We noticed that between March 14 and March 16, one HFT client, UID **9500, had continual high trading volumes. This breached our volume monitoring alerting threshold and our system suspended the client for trading in multiple periods. We have since communicated with this client and they had agreed to turn off their API trading since March 16. The client has also explained some of the details of their trading strategy.
This HFT client utilizes the global stock market volatility as one of the factors of their machine learning-based trading strategy. In the past week, due to the multiple historically-never-seen circuit breaks in US stock markets, their strategies became extremely sensitive. Nevertheless, the BTC price still crashed. They tried to minimize their alpha signal threshold and reduce their taking frequency. However, it was quite difficult to manually tune a machine learning-based strategy.
This client did maximize the trading rate limit, but there was no other sign or indication of them attempting to manipulate the Phemex order book. Our price was in a reasonable range around the mark price. This client has been trading on Phemex for a while and this has been the first time we have noticed this issue. We have taken swift action to correct the problem and do not foresee this type of event happening again.
In regard to our retail users, we have already reached a new high of 110k registrations and hit 10k active trading users during the past 2 days. Our trading engines have proven their power, capacity, and velocity.
Beyond this growth, many well-respected traders have also chosen Phemex as their high priority alternative for margin trading because of our stable performance, even through the insane market volatility seen last week. All these factors have brought us considerable new traffic.
We would like to share some data taken from Alexa.com to demonstrate the promising trend we are seeing. The image seen below shows our improvement in terms of ranking over time. Phemex has experienced an exponential level of growth in the last 3 months since our launch date on November 25, 2019.
I would like to express my deepest gratitude to our excellent team for all the hard work that they have done so far. We look forward to providing you the best trading products and consistent quality service in 2020.