  We introduce systematic tests exploiting robust statistical and behavioral
patterns in trading to detect fake transactions on 29 cryptocurrency exchanges.
Regulated exchanges feature patterns consistently observed in financial markets
and nature; abnormal first-significant-digit distributions, size rounding, and
transaction tail distributions on unregulated exchanges reveal rampant
manipulations unlikely driven by strategy or exchange heterogeneity. We
quantify the wash trading on each unregulated exchange, which averaged over 70%
of the reported volume. We further document how these fabricated volumes
(trillions of dollars annually) improve exchange ranking, temporarily distort
prices, and relate to exchange characteristics (e.g., age and userbase), market
conditions, and regulation.
