Wash trading refers to the simultaneous or nearly simultaneous buying and selling of the same assets for the sake of artificially inflating trading volumes and deceptively attracting traders to partic
When the traders see increased activity in the market, they start actively buying or selling, causing the price to rise or fall accordingly.
The attacker, by pushing the price in the direction they want, gains good odds to make money.
Wash trading can be done in a variety of ways.
🔹It can involve one person creating multiple accounts and transferring huge amounts of money between them.
🔹It can also be done by conspiracy, where participants transfer assets to each other, creating the illusion of activity.
Such a scheme is dangerous because investors believe in the fictional prospects of the coin, which eventually turn into losses and users' distrust of cryptocurrencies in general.
This can often be found in new projects that lure investors with trading activity, but actually have no practical value.
And not just new ones: even Bitcoin is involved in these kinds of transactions!
❗️According to a Forbes study from last year, 51% of all daily Bitcoin trading volume is fake!
In the Traditional US markets, wash trading has long been banned.
But in crypto it has become a serious problem, as it's impossible to control.
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