How Do Centralized Exchanges (CEX) Typically Implement Market Surveillance to Detect Manipulative Trading Practices?
CEXs employ sophisticated surveillance systems that monitor trading data in real-time to detect anomalies and suspicious patterns. These systems look for classic market manipulation schemes, including wash trading, spoofing, and layering.
They use algorithms and machine learning to flag activities that suggest insider trading or front-running by exchange employees. Detected instances lead to investigations and potential account suspensions or regulatory reporting.
