{"id":22295,"date":"2023-09-13T03:44:36","date_gmt":"2023-09-13T03:44:36","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/decentralized-exchanges-a-magnet-for-crypto-wash-traders-solidus-labs\/"},"modified":"2023-09-13T03:44:38","modified_gmt":"2023-09-13T03:44:38","slug":"decentralized-exchanges-a-magnet-for-crypto-wash-traders-solidus-labs","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/decentralized-exchanges-a-magnet-for-crypto-wash-traders-solidus-labs\/","title":{"rendered":"Decentralized exchanges a magnet for crypto wash traders: Solidus Labs"},"content":{"rendered":"

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Over 20,000 crypto tokens have been manipulated via decentralized exchange (DEX) wash trading in the last three years, according to market surveillance firm Solidus Labs.<\/p>\n

In the second part of its 2023 Crypto Market Manipulation Report<\/em> released Sept. 12, Solidus said among a sample of 30,000 Ethereum-based DEX liquidity pools, nearly 70% were found to have executed wash trades since September 2020 \u2014 making up for around $2 billion worth of crypto.<\/p>\n

Wash trading is a form of market manipulation where an entity buys and sells the same asset giving the false impression of market activity.<\/p>\n

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Major Update! Unveiling Part Two of our Crypto Market Manipulation Report! Our data shows a shocking $2 billion #washtrades<\/a> on DEXs since Sept 2020. That’s affecting over 20,000 tokens! \u26a0\ufe0f<\/p>\n

Full details here in our report: https:\/\/t.co\/pcRvMBGfb0<\/p>\n

\u2014 Solidus Labs (@Solidus_Labs) September 12, 2023<\/a><\/p><\/blockquote>\n

Wash trades are present in traditional finance, however, Solidus argued market manipulators often have easier means to do so when it comes to crypto. <\/p>\n

\u201cIn crypto, liquidity is fragmented across a variety of centralized and decentralized exchanges, resulting in smaller markets that are easier to manipulate.\u201d<\/p><\/blockquote>\n

There\u2019s also an ongoing regulatory question over who is responsible for on-chain wash trading detection and prevention \u2014 likely given the borderless nature of decentralized finance. <\/p>\n

“Market manipulation remains a significant challenge within the crypto industry, especially in an era of greater regulatory scrutiny and institutional adoption,” Solidus founder and CEO Asaf Meir said in a statement.<\/p>\n

“The wash trading activity we have unearthed here is a clear sign of market manipulation, and it must be prevented for crypto and DeFi to flourish.\u201d<\/p><\/blockquote>\n

Solidus explained wash traders come in all shapes and sizes, from token deployers looking for an easy rug pull; to speculators attempting to game an upcoming token airdrop; to exchange and marketplace operators reporting higher trading volumes to attract investors and users.<\/p>\n

Related: <\/em><\/strong>NFT wash trading increases by 126% in February: Data<\/em><\/strong><\/p>\n

In 2022, a National Bureau of Economic Research study suggested more than 70% of unregulated exchange volumes were wash trades. <\/p>\n

According to the researchers, there are short-term incentives for wash trading and suggested fake transactions often impact the rankings of the exchanges on data and statistics websites such as CoinMarketCap and CoinGecko.<\/p>\n

In addition, fake transactions also affect the crypto prices within the exchanges over the short term.<\/p>\n

Hodler\u2019s Digest, Sept. 3-9: Binance\u2019s exec exodus, Nasdaq to trade AI orders and SBF loses bail appeal<\/em><\/strong><\/p>\n<\/div>\n