Intent. How do you differentiate hacking from legitimate access? You're just sending byte streams to the server and it decided to give you access to something,

Intent. How do you differentiate hacking from legitimate access? You're just sending byte streams to the server and it decided to give you access to something, after all. The reason it's illegal or banned on normal exchanges is because it drives out legitimate customers and you end up with a den of thieves. Everybody looks at the order book to gauge liquidity and make decisions, not just bots. Users want prices to be relatively stable and tied to fundamental values. An exchange where manipulators spoof or wipe the order book in a high stakes game of chicken is unstable. Imagine an eBay with no protections against counterfeit goods, or a StubHub full of fraudulent tickets. And spoofing is very easy for regulators to detect. The behaviors of market makers, who also cancel many orders, and spoofers, could not be more different. Market makers place orders for small symmetric size on both sides of the book. If they quote asymmetric sizes, they quote smaller bids when they're long, or smaller offers when short. They cancel bids after they buy, offers after they sell. Spoofers do the exact opposite. They place asymmetric sizes where one side makes up a large amount of liquidity. They place big size on the same side when long or short to press their trades favorably. They cancel buys after they sell, and sells after they buy.