Price manipulation through wash trading is an all-too-familiar tactic utilized by entities to seize profits. Buying & selling the identical asset at the same time to generate false activity in the market, while ownership of the asset does not really change, is a common occurrence. Owing to the peculiarity of the cryptocurrency technology, that offers a quantified separation-of-liquidity, smaller markets can easily be manipulated via large orders. After thoroughly investigating the data for 3 long years, Solidus Labs recently reported apparent price manipulation & activity valuation of billions of US dollars, backing their exact statement of “…”.
Comprehending the potential for wash trading swelling unmanageable is worryingly widespread- An independant study, conducted by the esteemed National Bureau of Economic Research [NBER] in 2022, uncovered an alarming fact that 70% of unregulated trade transactions were estimate to be insolently perpetrated via wash trading. Contributing to this situation, even within the realm of Non-Fungible Tokens, or in short, NFT’s, wash trading proceeds illegally. As lesser of a surprise, blockchain exchanges of Ethereum churning out roughly $216M across the evaluation of NFTs in 2 months lasts, CryptoSlam reported back $125.9M of it constituted wash trading. Emanating varying results was Solana, Polygone, and other DEX’s. It hence awaits insistence from law enforcing authorities who will intervene bearing Fruitloop’s findings of?”. Passionately expressing this in their longest, extended statemement, Solidus ascertains, “…”
