Can a Surveillance System Detect Front-Running If the Perpetrator Uses Multiple Accounts?
Yes, modern surveillance systems are designed to detect this through cross-market and cross-account monitoring. They use sophisticated clustering algorithms and behavioral analysis to link accounts that exhibit similar trading patterns, share the same IP addresses, or transfer funds between each other.
This "unmasking" process allows the system to identify that a single entity is orchestrating a front-running strategy across multiple accounts to evade detection limits.
Glossar
Cross-Account Monitoring
Surveillance ⎊ Cross-Account Monitoring is a critical surveillance practice involving the aggregation and analysis of trading data across multiple accounts potentially controlled by a single entity or group.
Front-Running Strategy
Exploitation ⎊ Front-running strategy, within cryptocurrency, options, and derivatives, represents the illicit practice of leveraging non-public information regarding pending transactions to execute trades ahead of those transactions, capitalizing on the anticipated price movement.
Surveillance Systems
Framework ⎊ Surveillance systems, within cryptocurrency, options trading, and financial derivatives, increasingly rely on a layered framework integrating real-time data feeds, algorithmic anomaly detection, and robust reporting mechanisms.