TheChek News Flow

Aerospace company has long worked on NASA missions, but latest rocket has faced cost overruns and delays in recent years

The National Aeronautics and Space Administration’s scheduled test launch Monday of a new mega-rocket will give Boeing Co. BA -2.86% another chance to prove it can pull off big national projects following past missteps.

Boeing is the biggest contractor for the agency’s Space Launch System, a 38-story-tall rocket that is supposed to launch the Orion spacecraft without crew toward the moon—and in 2025 blast U.S. astronauts back there as part of NASA’s Artemis missions to explore space.

“We’re providing both the brains and muscle,” Boeing says on its website, “to make the next generation of human spaceflight possible.”

Boeing has a long history developing NASA vehicles and handling missions for the agency. The company helped deliver astronauts to the moon in the 1960s, and worked on Space Shuttle operations before that program ended more than a decade ago. It also provides support for the International Space Station for NASA.

Boeing’s space business has struggled more recently, including technical and management problems with the SLS. Stumbles with its separate Starliner spacecraft repeatedly delayed a flight for NASA, and that ship has lagged behind a competing vehicle from Elon Musk’s SpaceX.

A successful SLS launch would help Boeing restore its reputation as it competes for government contracts and engineering talent with startups.

“The SLS is just another opportunity for us to show how well Boeing can do space,” said John Shannon, a Boeing vice president who oversees the SLS program for the company. “This vehicle can do something that no other vehicle can do, and we haven’t had a rocket like this in 50 years.”

Mr. Shannon added the company is confident that two of the big parts of the mission that Boeing engineers worked on—the main stage of the rocket used during liftoff, and a propulsion system designed to give Orion a big push in space toward lunar orbit—will function as planned.

The test launch of SLS and Orion without crew was supposed to happen four years ago, but Boeing and other contractors faced technical slip-ups and challenges the NASA inspector general has cited as among the sources of delays and cost overruns.

The belated test launch comes after problems Boeing has faced elsewhere in its commercial, military and space segments.

Three years ago, Boeing botched a test launch of its Starliner space capsule, sending it into the wrong orbit and failing to dock with the International Space Station. Subsequent technical problems delayed a do-over until a successful Starliner test launch earlier this year. The company has booked $767 million in charges related to that program over the past three years.

“We need Boeing to get this right,” said Scott Pace, a former NASA official who is director of the Space Policy Institute at George Washington University. “There’s a long history in recent years of Boeing’s technical problems, which they’re trying to fix—I sure hope they do, because it’s a national asset and it needs to work.”

Any major problems with this initial Space Launch System test launch could set back NASA’s planned Artemis missions to the moon. Two years from now, astronauts are scheduled to be on Orion as another SLS rocket launches it into space. And as soon as 2025, NASA wants SLS to propel astronauts to lunar orbit, where they would get on a SpaceX lander to travel to the lunar surface.

The missions could lay the groundwork for a possible future lunar base and an eventual operation to Mars, according to plans NASA has laid out under Artemis.

The overall project also involves aerospace companies including Northrop Grumman Corp. and Lockheed Martin Corp. Those contractors also have at times faced technical issues and delays flagged by the space agency’s inspector general. Lockheed Martin years ago dealt with challenges related to flight software and valves used for Orion, while Northrop Grumman, responsible for booster rockets on SLS, did so with insulation and avionics, according to reports from NASA’s inspector general.

Building and testing a new generation of exploration spacecraft that meet NASA’s stringent requirements has been challenging, with supply chains posing difficulties in recent years, said Mike Hawes, a vice president and program manager for Orion at Lockheed. Wendy Williams, vice president for propulsion systems at Northrop Grumman, said the company has incorporated lessons from building boosters for the first Artemis flight into the second, reducing timelines and costs.

The SLS program took shape amid political wrangling between the Obama White House and Congress in 2010. The project adapted technology from NASA’s now-ended Space Shuttle program to develop the world’s most powerful rocket capable of propelling humans and big spacecraft far into space. Some critics dubbed it the “rocket to nowhere” or the “Senate Launch System.”

Congress initially sought to launch SLS in 2016, but NASA early on saw the first mission happening in 2018. NASA Inspector General Paul Martin has estimated each of the first four Artemis missions will cost $4.1 billion, a figure he said is unsustainable.

Mr. Martin’s office had flagged Boeing miscalculations related to the scope of the project, welding problems and other troubles. “There was poor planning and poor execution,” he said in congressional testimony earlier this year.

Mr. Shannon, the Boeing manager for SLS, has said the company faced difficulties with the infrastructure at a Louisiana facility where NASA wanted the company to build the rocket. He said the company underestimated how long it would take to get its suppliers to provide needed parts.

“The aerospace supply chain for human spaceflight had really atrophied,” he said, citing the end of NASA’s Space Shuttle program years earlier for that. “We had to go in and really reinvigorate that supply chain.”

As of a year ago, Boeing and one of its joint ventures were awarded contracts worth about $12 billion over more than a dozen years for SLS work, according to a NASA inspector general report from November. Those deals represented 59% of the total contract value for the rocket program. Unlike with other government contracts, Boeing hasn’t booked any charges for SLS because many of its agreements with NASA are so-called cost-plus contracts, meaning taxpayers foot the bill for cost increases.

Mr. Shannon said the SLS program is profitable for Boeing but added: “We feel like we have a responsibility to provide good value to the taxpayer.”

As part of an attempt to reduce future SLS costs, NASA is planning to restructure the program’s finances. While the space agency offered few details, a NASA spokeswoman said the plan involved “creating a more affordable and sustainable exploration framework” in the future by “shifting more responsibility to industry.”

Boeing Chief Executive David Calhoun said recently he didn’t want to expose the company to significant financial risk with SLS. He told the trade publication Aviation Week: “I want to prove it all out to be ready, but I’m not going to do silly things, like lose money for 10 years.”

Korea Shipbuilding & Offshore Engineering chief expects alternative fuel boom

One of the world’s biggest shipbuilders expects orders for methanol-powered ships to surge in the coming decades, as tougher environmental regulations intensify a push to use alternative fuel sources.

The bullish forecast by Korea Shipbuilding & Offshore Engineering comes as the company accelerates away from fossil fuels and competition with Chinese rivals intensifies.

“Orders for methanol-fuelled ships will increase sharply for more than 10 years, although LNG [liquefied natural gas] burning ships will remain the mainstream for the next two decades,” chief executive Ka Sam-hyun told the Financial Times in an interview.

Analysts expect about 50 methanol dual-fuelled vessels to be ordered worldwide before the end of this year as shipowners in Asia and Europe replace older container fleets. That compares with orders for 19 methanol dual-fuelled vessels placed last year.

The shipping industry is under increasing pressure to decarbonise as the International Maritime Organisation works to cut greenhouse gas emissions from ships at least 50 per cent by 2050, compared with 2008 levels.

With global shipping responsible for 90 per cent of world trade, the industry accounts for 3-4 per cent of global greenhouse gas emissions, roughly equivalent to Germany’s annual emissions, according to Longspur Capital.

Competition to grab a bigger share of the nascent market is intensifying between South Korea and China. Building a dual-fuelled methanol vessel is cheaper than one designed to use LNG, due to technological advances and because methanol does not require expensive cryogenic bunker tanks and fuel gas handling systems.

AP Møller-Maersk, the world’s biggest container shipping company, has ordered 12 methanol-powered container ships worth $2.2bn from KSOE to be delivered starting in 2024. In June, it floated a tender with shipyards for more ships operating on methanol.

French shipping company CMA CGM has also placed a series of orders for methanol dual-fuel container ships worth about $1bn in total with China’s Dalian Shipbuilding Industry.

“You cannot replace all fleets with only clean fuel by 2040. LNG is a transitional option but it will last for another generation, given the limited supply of methanol,” said Ka.

“Ammonia is toxic and still too expensive. Eventually, we should move towards hydrogen ships and electric-motor ships, but it is still too far off.”

LNG has been widely used as an alternative fuel for shipping companies, but methanol is gaining interest among shipbuilders. KSOE has won orders to build 29 methanol-fuelled ships.

But analysts said there was a limit to how much methanol-fuelled fleets can be expanded.

“Shipowners are looking for alternative fuel sources other than LNG that can reduce carbon emissions further,” said Yang Jong-seo, a researcher at the Export-Import Bank of Korea. “But it is difficult to secure a large quantity of methanol to fuel ships and they still need to perfect the carbon capture and storage technology.”

Yang added that developing eco-friendly shipbuilding technology was essential for Korean shipyards to stave off increasing competition from low-cost Chinese rivals.

Adrian Cheng says his New World Development group will spend $1.5bn to buy land in next year

Hong Kong real estate tycoon Adrian Cheng has called the bottom of mainland China’s property market crash, saying his New World Development group plans to invest Rmb10bn ($1.46bn) in land over the next year.

Cheng, chief executive of Hong Kong-listed New World Development and heir to the Chow Tai Fook family fortune, is more upbeat than many analysts, who say Chinese property prices in the sector could fall further amid a liquidity crisis and a slowing economy.

“Now is the bottom, and it’s going to slowly recover. See I’m very optimistic that in the next one or two years, it will be recovering very, very well,” Cheng told the Financial Times in an interview. “It’s a good opportunity to start acquiring our war chest, in land and assets.”

Cheng said his group would invest the Rmb10bn over 12 months on land in top-tier Chinese cities such as Shanghai, Guangzhou, Hangzhou and Shenzhen.

New World has in recent years bought both industrial land and greenfield sites in China for development.

The group includes luxury mall brand K11, which Cheng has used to target the elite market by combining high-end retailers, restaurants and art installations. His 228,500-square metre K11 Ecoast mega retail development is scheduled to open in 2024 in Shenzhen, a city of 18mn across the border from Hong Kong that is a hub for tech companies such as Tencent.

Cheng said New World group companies’ healthy gearing ratios and capitalisation, as well as their experience in the mainland, gave them an advantage in the Chinese auction market.

“This crisis becomes an opportunity because for us, we don’t have . . . much competition anymore, because a lot of local developers are financially quite, quite strained, they’re very distressed,” he said.

China cut its mortgage lending rate for the second time in a year last week as the People’s Bank of China attempts to limit the damage from the liquidity problems pummeling the property sector.

The crisis, which started at developer Evergrande, has spread throughout the industry with a wave of defaults and companies failing to complete apartments that buyers have already partially paid to acquire.

“It’s very hard to say ‘Yes, this is the bottom’ . . . there is no sign of a strong recovery,” said Rosealea Yao, a property market analyst at Gavekal Dragonomics, citing in particular the prospects for retail property. “The big backdrop is people are moving from offline retail to online retail: the demand for retail space is not that strong even in the most popular places,” Yao said.

Stephanie Lau, a senior credit officer at Moody’s, said Hong Kong developers were typically conservative and would probably seek favourable sites in first-tier cities. “Even if it is seemingly so that there are opportunities of getting on cheaper deals . . . I think most [developers] are approaching it very carefully,” Lau said.

Hong Kong developers have also suffered from the economic disruption wrought by pandemic border controls between the Chinese territory and the mainland.

Cheng said there would be a delay in tenants moving into his new 11 Skies office and retail project in Hong Kong, which is intended to serve the region around the territory that the Chinese government is marketing as the “Greater Bay Area”.

New World’s stock price closed at HK$25.95 on Friday, down over 14 per cent since the start of the year, a fall that is broadly in line with the overall drop in the Hang Seng properties index.

- "Frontloading rate hikes is a reasonable policy choice. We should be open to discussing both 50 and 75 basis points as possible moves."

- "If we see that we need to go beyond the neutral, I have no doubt we will. If we don’t see significant decreases in core inflation, we may need to go beyond the neutral. But let’s not get ahead of ourselves."

- "With this high inflation, avoiding a recession will be difficult, the risk is substantial and a technical recession is very likely. In Latvia, a recession is part of a baseline scenario."

Within the emerging and turbulent market for cryptocurrencies, where there are no fewer than 10,000 tokens, bitcoin, is the great granddaddy, the blue-chip, representing 40% of the $1 trillion in crypto assets outstanding. Bitcoin is crypto’s gateway drug. An estimated 46 million adult Americans already own it according to New York Digital Investment Group, and an increasing number of institutional investors and corporations are warming to the nascent alternative asset.

But can you trust what your crypto exchange or e-brokerage reports about trading in the most important digital currency?

One of the most common criticisms of bitcoin is pervasive wash trading (a form of fake volume) and poor surveillance across exchanges. The U.S. Commodity Futures Trading Commission defines wash trading as “entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing the trader's market position.” The reason why some traders engage in wash trading is to inflate the trading volume of an asset to give the appearance of rising popularity. In some cases trading bots execute these wash trades in tokens, increasing volume, while at the same time insiders reinforce the activity with bullish remarks, driving up the price in what is effectively a pump and dump scheme. Wash trading also benefits exchanges because it allows them to appear to have more volume than they actually do, potentially encouraging more legitimate trading.

There is no universally accepted method of calculating bitcoin daily volume, even among the industry’s most reputable research firms. For instance, as of this writing, CoinMarketCap puts the latest 24-hour trading of bitcoin at $32 billion, CoinGecko at $27 billion, Nomics at $57 billion and Messari at $5 billion.

Adding to the challenges are persistent fears about the solvency of crypto exchanges, underscored by the public collapses of Voyager and Celsius. In an exclusive interview with Forbes in late June, FTX CEO Sam Bankman-Fried commented that there are many exchange bankruptcies yet to come.

A significant repercussion of this lack of faith in its underlying markets is the Security and Exchange Commission’s refusal to approve a spot bitcoin ETF.

Unfortunately for the bitcoin ETF hopefuls, many of these fears and criticisms are valid. As part of Forbes research into the crypto ecosystem using 2021 data, we ranked the 60 best exchanges in March. More recently we conducted a deeper-dive into the bitcoin trading markets to answer a few pressing questions:

1. Where is bitcoin traded?
2. How much bitcoin gets traded every day?
3. How is bitcoin traded?

Our study evaluated 157 crypto exchanges across the world. Here are our main findings:

1. More than half of all reported trading volume is likely to be fake or non-economic. Forbes estimates the global daily bitcoin volume for the industry was $128 billion on June 14. That is 51% less than the $262 billion one would get by taking the sum of self-reported volume from multiple sources.
2. Tether, the world’s largest stablecoin, continues to be a dominant player in the crypto trading economy, especially when it comes to trades against bitcoin. Its current market capitalization is $68 billion, despite questions about its reserves.
3. In terms of how much bitcoin activity takes place at these firms, 21 crypto exchanges generate $1 billion or more in daily trading activity, while the next 33 exchanges had volume between $200 million and $999 million across all contract types, spot, futures and perpetuals. Perpetual futures, or perpetual swaps as they are also known, are futures contracts that don’t require investors to roll over their positions. Binance is the clear leader, with a 27% market share, followed by FTX. Looking only at spot bitcoin, the top position is shared by Binance, FTX, and OKX. Chicago-based CME Group is the market leader in bitcoin futures trading.
4. The biggest problem areas regarding fake volume are firms that tout big volume but operate with little or no regulatory oversight that would make their figures more credible, notably Binance, MEXC Global and Bybit. Altogether, the lesser regulated exchanges in our study account for approximately $89 billion of the true volume (they claim $217 billion).
5. The creation of new trading assets and products such as stablecoins and perpetual futures adds complications for national authorities seeking to regulate crypto markets. Major U.S. exchanges hardly utilize these instruments or contracts in any of their trading. However, offshore exchanges make significant use of them as ways to synthetically create U.S. dollar liquidity on their platforms (they cannot get U.S. bank accounts).
6. In the Western world and particularly in the U.S., it is tempting to think of bitcoin only trading against either the U.S. dollar or the euro and British pound. But some of the largest trading pair activity occurs against fiat currencies like the Japanese yen and Korean won and against major stablecoins like Binance U.S. dollar and the USD coin.
7. 573 million people visit crypto exchange websites on a monthly basis.

We hope that this report builds on top of the important work done by other digital asset researchers such as Bitwise, which estimated in a March 2019 white paper that 95% of CoinMarketCap’s bitcoin trading volume was fake and/or non-economic.

Forbes uses quantitative and qualitative analyses to adjust trading volume reported by the exchanges. Unlike other methods that carry out tests on transactional data (and can also be duped), Forbes grades a firm’s credibility by evaluating no fewer than five datasets that together inspire or diminish confidence in a firm’s self-reported data. Data comes from four crypto media firms, CoinMarketCap, CoinGecko, Nomics and Messari, as well as multiple exchanges and two other third-party data providers.

We apply volume discounts based on a proprietary methodology that relies on 10 factors such as an exchange’s home regulator if any and volume metrics based on an exchange’s web traffic and estimated workforce size. We also use the number and quality of crypto licenses as proxy to gauge the sophistication of each crypto exchange in matters pertaining to regulation and trade surveillance. If a firm shows a commitment to transparency by conducting token proofs of reserve or by participating in Forbes crypto exchange surveys, it qualifies for a “transparency credit” that lowers any discount that may otherwise apply.

Many of these factors were also present in Forbes’ crypto exchange ranking formula. We divided them into three categories:

Group 1: 48 crypto exchanges that were assigned discounts of 0-25% generated $39 billion of real bitcoin trading activity across all markets–spot, derivatives and futures–on June 14.

Group 2: 73 exchanges with volume discounts of 26% to 79% generated $81 billion in transactional activity (vs. $158 billion claimed)

Group 3: The remaining 36 firms were penalized with a high discount rate (80-99%) and traded $7.7 billion out of $59 billion claimed.

Despite crypto’s global nature, spot bitcoin trading activity is centered around relatively few currency pairs and stablecoins. Stablecoin USDT is the biggest, followed by the U.S. dollar. The next biggest fiat assets are the yen and won.

BTC-US DOLLAR Daily Volume

Group 1 exchanges, many of which are based in the U.S., provide $24.3 billion in daily USD-BTC liquidity, and Group 2 exchanges add $17.3 billion. The prominence of Group 1 exchanges as the main source of BTC-USD occurs across spot, perpetuals, and futures contracts. CME Group is the leading provider of bitcoin futures globally, with $2.1 billion of USD-BTC futures changing hands daily. There are at least 27 crypto exchanges–12 in Group 1–that have daily BTC-USD liquidity greater than $5 million.

BTC - U.S. TETHER Daily Volume

At $71.4 billion daily volume, bitcoin-tether (BTC-USDT) activity exceeds that of BTC-USD by 57%, with 79% generated by Group 2 crypto exchanges and 5% by those in Group 3. There are 77 exchanges–44 in Group 2, 12 in Group 1–with daily bitcoin-tether volume above $5 million. Tether is prominent across spot and perpetual futures markets, less so among the regulated futures industry, which is largely absent outside of the U.S.

BTC - U.S. DOLLAR COIN Daily Volume

U.S. dollar coin (USDC) is gaining adoption in the stablecoin arena. Daily liquidity for bitcoin-USDC was $2.15 billion, with Groups 1 and 2 splitting that total 39% and 60%, respectively. An interesting observation is that Group 2 exchanges use USDC actively in the spot bitcoin market whereas Group 1 exchanges do so with perpetuals. This different use could suggest that Group 2 exchanges may be open to the idea of supporting an alternative to tether’s dominance in the stablecoin market.

USDT and Binance USD (BUSD) each generate more volume than USDC, but the latter now has 26 crypto exchanges (17 in Group 2) with daily trading volume of $5 million or more, versus 77 exchanges for USDT and five with BUSD. If tether’s prominence begins to wane, USDC could be the stablecoin most likely to pick up its crown.

CRYPTO EXCHANGES BY REAL TRADING VOLUME

Bitcoin Trading Volume by Exchange Group

The top-10 Group 1 crypto exchanges by volume originate from across the world, with three from the U.S. (CME Group, Coinbase, Kraken), one from Singapore (Crypto.com), one from Europe (LMAX Digital), four from financial offshore centers (FTX, OKX, Gate.io, BitMEX), and one from Central America (Deribit).

Among Group 1 firms, FTX is the largest and growing at a fast clip. It wasn’t until mid 2021 when institutional funding fueled a transformation of FTX operations from a midsized unregulated exchange focused on offshore crypto derivatives to a global group of exchanges today regulated in the U.S., Japan, Europe and elsewhere. In addition to derivatives, FTX trades in crypto spot, tokenized stocks and has recently added equities.

Group 2 crypto exchanges tend to be large and possess wide product offerings. They primarily focus on growth and tend to have much less interest in being regulated where they operate. They also generally lack robust ways to track and deter wash trading. Binance is by far the largest crypto exchange in Group 2, with $34.2 billion of daily trading activity followed by Bybit with $8.9 billion. The majority of these exchanges are based in offshore havens such as the Seychelles and British Virgin Islands.

Group 3 consists of 36 crypto exchanges which, with few exceptions, are unregulated and small. Their huge self reported volume and tiny visitor number cast doubt on the possibility that a limited audience could indeed generate that much trading activity. A case in point is BitCoke, which CoinMarketCap identifies as a Hong Kong-based, Cayman Island-domiciled exchange that purportedly generated $14 billion daily–mostly from BTC-USDT perpetuals. SimilarWeb, however, indicates that the exchange’s domain receives less than 10,000 monthly visitors–with 53% coming from Argentina alone. The discrepancies in volume versus traffic plus lack of regulatory credentials result in Forbes discounting this firm’s volume by 95% to $702 million.

LARGEST EXCHANGES BY MAJOR BITCOIN PAIR

As discussed above, BTC/USD and BTC/USDT are by far the biggest spot pairs for bitcoin, but there are a few other pairs worth mentioning. The next largest are BTC-KWR, BTC-JPY, BTC-USDC, and BTC-EUR. An exchange’s decision to offer base assets across bitcoin, especially when it comes to fiat, usually comes down to the local fiat currency used by an exchange’s client base. Each of the companies trading bitcoin against the won or yen are based in South Korea or Japan respectively. USDC, by nature of its blockchain-based DNA, is easier to cross national-boundaries. Readers may notice that Kraken, Binance or Coinbase are not based in Europe, though they each have a series of licenses to operate in certain countries. They each offer euro trading as a way to onboard new users, but unlike the South Korea or Japan-based exchanges, the euro is not their most dominant base asset for trading.

However, while eight pairs by volume garner the majority of bitcoin volume, there are dozens of other varieties trading at obscure exchanges uncounted even in our present study. For example, it is difficult to find the amount of BTC-NGN (Nigerian naira) volume traded in Nigeria because crypto data firms like Nomics, CoinMarketCap and CoinGecko generally do not track it. One can safely assume that local crypto exchanges not widely known outside of Nigeria capture most BTC-NGN liquidity, which is likely true for many other exchanges operating in emerging markets.

These observations are largely true when it comes to perpetual futures as well. However, the won and the yen do not appear to have gained significant market share in this area.

Finally, when it comes to the traditional futures markets, such as those that offer regular monthly expirations, the only two pairs that seem to matter are BTC-USD and BTC-USDT.

KEY TAKEAWAYS

The Forbes Real Volume study revealed a number of key insights for crypto investors and industry.

Bitcoin may just be the beginning of the problem. If reported trading volumes for bitcoin, the most regulated and closely-watched crypto asset around the world, are untrustworthy, then metrics for even smaller assets should be taken with even greater grains of salt. At its best, trading volume is one of the most measurable signs of investor interest, but it can be easily manipulated to convince novice investors that it has much more demand than it actually does.

Binance remains the 800-lb elephant in the room. Even after a 45% discount on its volume, Binance still generates the equivalent of 27.3% of all “real” trading volume. There is no other crypto exchange that can match its market power, and it's been that way for the past two years. That said, while Binance has been saying all of the right things about cooperating with regulators - it has started getting licenses around the world and is promising to announce a global headquarters - questions remain about its operational controls. Unless regulators can get comfortable with Binance’s legitimacy, it may be difficult to envision a spot ETF getting approved anytime soon.

Tether remains “Too Big To Fail” - for now: This study invites more questions about the true use and value of two of the largest stablecoins - USDT and BUSD. Say what you will about Tether, and people have, it has found product-market fit in a big way. But that is the exact problem in the minds of many so-called Tether Truthers, who do not believe that the $68 billion is actually backed by reserves. It is hard to imagine what would happen to markets if traders stopped trusting tether - and to be fair there is little evidence that this is happening - and none of its competitors were willing to take its place.

Areas For Future Study

The role of stablecoins in market manipulation. We did not see any evidence that tether-based trading pairs were any more prone to fraud than other assets. However, this area is worth looking into further, especially if tether begins to deviate again from its $1 peg or other algorithmic stablecoins begin to gain traction in large spot-market trading. An ostensibly stable base asset that has higher-than-expected volatility can always lead to both legitimate arbitrage opportunities as well as openings for fraud.

The potential of perpetual futures to be manipulated. Through our research, including first-person interviews with direct market participants, we did not see any evidence that perpetual futures are more prone to wash trading and other forms of manipulation than conventional futures or spot contracts. However, given the relatively novel nature of this product (it was created in 2016), as well as its dominance in crypto trading, it is well worth deeper study.

The future of DEXS in market manipulation. This report did not focus on decentralized exchanges (DEXs), in large part due to the fact that they are not major players in bitcoin trading. To the contrary, when it comes to spot markets most of the major players have separated themselves from the major centralized exchanges by specializing in novel ways to provide liquidity in long-tail assets that are not financially worthwhile for many traditional exchanges to offer. That said, the market share of DEXs has slowly been creeping up to that of spot–there are even days where Uniswap, the largest DEX, has more trading volume than Coinbase.

Within the emerging and turbulent market for cryptocurrencies, where there are no fewer than 10,000 tokens, bitcoin, is the great granddaddy, the blue-chip, representing 40% of the $1 trillion in crypto assets outstanding. Bitcoin is crypto’s gateway drug. An estimated 46 million adult Americans already own it according to New York Digital Investment Group, and an increasing number of institutional investors and corporations are warming to the nascent alternative asset.

But can you trust what your crypto exchange or e-brokerage reports about trading in the most important digital currency?

One of the most common criticisms of bitcoin is pervasive wash trading (a form of fake volume) and poor surveillance across exchanges. The U.S. Commodity Futures Trading Commission defines wash trading as “entering into, or purporting to enter into, transactions to give the appearance that purchases and sales have been made, without incurring market risk or changing the trader's market position.” The reason why some traders engage in wash trading is to inflate the trading volume of an asset to give the appearance of rising popularity. In some cases trading bots execute these wash trades in tokens, increasing volume, while at the same time insiders reinforce the activity with bullish remarks, driving up the price in what is effectively a pump and dump scheme. Wash trading also benefits exchanges because it allows them to appear to have more volume than they actually do, potentially encouraging more legitimate trading.

There is no universally accepted method of calculating bitcoin daily volume, even among the industry’s most reputable research firms. For instance, as of this writing, CoinMarketCap puts the latest 24-hour trading of bitcoin at $32 billion, CoinGecko at $27 billion, Nomics at $57 billion and Messari at $5 billion.

Adding to the challenges are persistent fears about the solvency of crypto exchanges, underscored by the public collapses of Voyager and Celsius. In an exclusive interview with Forbes in late June, FTX CEO Sam Bankman-Fried commented that there are many exchange bankruptcies yet to come.

A significant repercussion of this lack of faith in its underlying markets is the Security and Exchange Commission’s refusal to approve a spot bitcoin ETF.

Unfortunately for the bitcoin ETF hopefuls, many of these fears and criticisms are valid. As part of Forbes research into the crypto ecosystem using 2021 data, we ranked the 60 best exchanges in March. More recently we conducted a deeper-dive into the bitcoin trading markets to answer a few pressing questions:

1. Where is bitcoin traded?
2. How much bitcoin gets traded every day?
3. How is bitcoin traded?

Our study evaluated 157 crypto exchanges across the world. Here are our main findings:

1. More than half of all reported trading volume is likely to be fake or non-economic. Forbes estimates the global daily bitcoin volume for the industry was $128 billion on June 14. That is 51% less than the $262 billion one would get by taking the sum of self-reported volume from multiple sources.
2. Tether, the world’s largest stablecoin, continues to be a dominant player in the crypto trading economy, especially when it comes to trades against bitcoin. Its current market capitalization is $68 billion, despite questions about its reserves.
3. In terms of how much bitcoin activity takes place at these firms, 21 crypto exchanges generate $1 billion or more in daily trading activity, while the next 33 exchanges had volume between $200 million and $999 million across all contract types, spot, futures and perpetuals. Perpetual futures, or perpetual swaps as they are also known, are futures contracts that don’t require investors to roll over their positions. Binance is the clear leader, with a 27% market share, followed by FTX. Looking only at spot bitcoin, the top position is shared by Binance, FTX, and OKX. Chicago-based CME Group is the market leader in bitcoin futures trading.
4. The biggest problem areas regarding fake volume are firms that tout big volume but operate with little or no regulatory oversight that would make their figures more credible, notably Binance, MEXC Global and Bybit. Altogether, the lesser regulated exchanges in our study account for approximately $89 billion of the true volume (they claim $217 billion).
5. The creation of new trading assets and products such as stablecoins and perpetual futures adds complications for national authorities seeking to regulate crypto markets. Major U.S. exchanges hardly utilize these instruments or contracts in any of their trading. However, offshore exchanges make significant use of them as ways to synthetically create U.S. dollar liquidity on their platforms (they cannot get U.S. bank accounts).
6. In the Western world and particularly in the U.S., it is tempting to think of bitcoin only trading against either the U.S. dollar or the euro and British pound. But some of the largest trading pair activity occurs against fiat currencies like the Japanese yen and Korean won and against major stablecoins like Binance U.S. dollar and the USD coin.
7. 573 million people visit crypto exchange websites on a monthly basis.

We hope that this report builds on top of the important work done by other digital asset researchers such as Bitwise, which estimated in a March 2019 white paper that 95% of CoinMarketCap’s bitcoin trading volume was fake and/or non-economic.

Forbes uses quantitative and qualitative analyses to adjust trading volume reported by the exchanges. Unlike other methods that carry out tests on transactional data (and can also be duped), Forbes grades a firm’s credibility by evaluating no fewer than five datasets that together inspire or diminish confidence in a firm’s self-reported data. Data comes from four crypto media firms, CoinMarketCap, CoinGecko, Nomics and Messari, as well as multiple exchanges and two other third-party data providers.

We apply volume discounts based on a proprietary methodology that relies on 10 factors such as an exchange’s home regulator if any and volume metrics based on an exchange’s web traffic and estimated workforce size. We also use the number and quality of crypto licenses as proxy to gauge the sophistication of each crypto exchange in matters pertaining to regulation and trade surveillance. If a firm shows a commitment to transparency by conducting token proofs of reserve or by participating in Forbes crypto exchange surveys, it qualifies for a “transparency credit” that lowers any discount that may otherwise apply.

Many of these factors were also present in Forbes’ crypto exchange ranking formula. We divided them into three categories:

Group 1: 48 crypto exchanges that were assigned discounts of 0-25% generated $39 billion of real bitcoin trading activity across all markets–spot, derivatives and futures–on June 14.

Group 2: 73 exchanges with volume discounts of 26% to 79% generated $81 billion in transactional activity (vs. $158 billion claimed)

Group 3: The remaining 36 firms were penalized with a high discount rate (80-99%) and traded $7.7 billion out of $59 billion claimed.

Starting next month, applicants must take 16 hours of training and have social-media posts reviewed

Thousands of people across New York state are rushing to apply for concealed-weapons permits before a new state law that requires in-person training and a review of social-media accounts takes effect Thursday.

The number of people getting fingerprinted for background checks associated with pistol permits in the state this month has nearly tripled from August 2021 levels so far, according to the state Division of Criminal Justice Services.

New York lawmakers passed the new law barely a week after the U.S. Supreme Court in June invalidated the state’s prior permitting rules, which required that applicants demonstrate “proper cause” and “good moral character.” The court ruled that local officials had too much discretion to deny permits, in violation of the Second Amendment.

The law requires 16 hours of in-person training, including two hours of live-fire drills. People must disclose all social-media accounts used in the past three years, which will be reviewed by investigators who must determine whether an applicant has “the essential character, temperament and judgment necessary to be entrusted with a weapon and to use it only in a manner that does not endanger oneself or others.”

Republicans and gun-rights advocates said the new requirements are onerous.

Democratic Gov. Kathy Hochul has said the new social-media checks are analogous to interviews with an applicant’s neighbors. The law also prohibits the possession of weapons in a list of “sensitive places,” which include parks, day-care centers, government buildings and Manhattan’s Times Square.

There are several lawsuits challenging aspects of the law, including one filed by the Gun Owners of America, a gun-rights advocacy group. A federal judge in Syracuse heard arguments Tuesday about whether to issue an injunction that could prevent the new requirements from taking effect.

Meanwhile, New York’s gun-permitting laws are currently less restrictive than they have been in many years, though still not as loose as in states with leaders who support gun rights.

Until Sept. 1, applicants must pass a criminal-background check and provide references, but don’t have to provide a reason why they want a pistol permit. The vetting process can still take several months.

Joe Jastrzemski is the county clerk in Niagara County, in the northwestern corner of the state. The Republican has been urging local residents to apply for gun permits now because he believes the law taking effect Sept. 1 is burdensome on Second Amendment rights. He said seven hundred people have applied for permits since he issued an Aug. 15 press release encouraging people to do so, compared with 1,429 applications in all of 2021.

Mr. Jastrzemski said there were 80 people in line Thursday before the doors opened at 9 a.m. He started turning applicants away at noon because they couldn’t be processed before the end of the day.

“I had a guy standing in line at 5 o’clock this morning waiting for the doors to open,” he said. “There are a lot of upset people out there.”

Andrea Fitchlee, who bought her first rifle last year, changed her work schedule so she could spend six hours waiting in line Thursday to submit a pistol-permit application in Niagara County.

“We’re trying to get it while we still can, short of moving out of New York state,” she said.

There are usually surges in applications following court rulings or changes to law, said David Pucino, deputy chief counsel for the Giffords Law Center, a gun-control group.

In New York, concealed-weapons permits are processed locally by New York City and the state’s counties.

Local officials said they are seeing additional activity from people seeking to upgrade restricted pistol permits—which allow for possession at home or for target shooting—to a “fully carry” permit. Officials in Rensselaer County, the home of the two plaintiffs in the Supreme Court case, developed a one-page application form for such upgrades, County Clerk Frank Merola said.

“People are trying to get through the pipe,” he said as he walked past shelves in his Troy office holding the county’s roughly 10,000 active pistol permits.

An average of 90 applications for upgrades have been processed each day since July, Mr. Merola said. Each permit amendment must be considered and approved by a local judge.

Westchester County officials processed 733 such amendments in July, compared with 28 in the same month last year, according to a spokesman for the county Department of Public Safety. The police in Long Island’s Nassau County received 450 applications for upgrades since the decision was handed down, a spokesman said.

The New York City Police Department declined to release statistics on applications since the Supreme Court ruling. The department updated its regulations Thursday to conform with the new state law and eliminate requirements the Supreme Court struck down, including a “letter of necessity” for why an applicant is seeking a pistol permit.

The Supreme Court ruling in June also called into question similar laws in at least eight other states and the District of Columbia, where authorities hold substantial discretion over issuing concealed-weapons permits. Democratic lawmakers in New Jersey and California are considering legislation to update their firearms laws, while Maryland Gov. Larry Hogan, a Republican, suspended the state’s requirement that permit applicants have “good and substantial reason” for wanting a gun.

The average weekly number of permit applications is 982 so far in 2022, compared with 234 for all of 2021, the Maryland State Police said. In San Francisco, 40 people have applied for pistol permits since the Supreme Court decision, an abnormally high number, according to the sheriff’s office.