BTW the fact that GDAX has high fees doesn't mean it's expensive for them to create fictitious trades... they don't have to pay themselves fees!
Besides, I personally day-trade an average daily volume of ~$200k on GDAX's BTC/USD pair. And I am just one small fish. Imagine about a thousand other persons like me and it would easily explain their $250M daily volume...
There are whale volume discounts available on almost every exchange. Mid-level whales can get 0% rate for trading over certain number of Bitcoins. Back in 2013-14 you could even get NEGATIVE rates for trading large amounts. I.e., if I trade a certain number of BTC, I get a rebate at the end of the month. High volume boosts exchange's rating and brings more customers, so it is a no brainer to offer rebates.
If you remember early days of Chinese exchanges, they were doing millions of coins a day in first week of their launch. That was clear example of Exchanges themselves doing wash trading. All volume data is available in public domain for verification.
Bitfinex has traded 1 trillion (not billion) dollars in volume. How did a hacked exchange with no USD deposit or withdrawal method did it? Answer: wash trading and self-manipulation.
Bitfinex traded $1 billion, not $1 trillion: https://coinmarketcap.com/exchanges/bitfinex/ ($1,168,128,071)
«First, I know of at least one instance where it appears that a wash trade was not charged a fee for a trade.»
Absolutely zero evidence is provided. Just the author saying "trust me, I've seen it."
«Second, even if a fee is charged, that doesn’t mean a wash trader paying fees is really paying fees. If you’re a shareholder in Bitfinex, you’re allegedly paid dividends.»
This is mathematically false. Even if you hold, say, 10% of the shares (huge shareholder) you will still lose ~90% of your fees.
That's it. It's a thousand+ words post with ZERO evidence of massive wash trading.
The rest of the post is just ramblings on unrelated things.
I don't disagree there are shady/unethical practices occurring at Bitfinex, but wash trading is not one of them.
Re Tether-Bitfinex-washtrading, the paper trail indicates that Bitfinex and Tether have the same controlling interests. Dividends aren't the deciding factor - figuring out how both businesses can generate income (Tether via issuing unbacked USD; Bitfinex by driving real volume via pretending to have fake volume).
Unlike the issue of unaudited bank accounts, the wash trading issue isn't as easy to point out, since it requires (a) knowledge of trades taking place behind a black box, (b) high volumes capital to test these trades that requires sending that capital to these exchanges you're skeptical of.
If not, then you should definitely not let British Virgin Islands based Bitfinex hold them either. Use less risky options based in USA or EU, so you are at least protected by a decent legal and regulatory system.
So, with Bitfinex (1) trading 10 times more currency pairs than GDAX, (2) being older, and (3) having somewhat smaller fees, it's perfectly plausible they have manage to trade (only!) twice the volume of GDAX.