What are wash trading and money laundering in NFTs?
The simultaneous purchase and sale of crypto assets is called wash trading. Read this guide to understand the purpose of a wash trade. Why is wash trading a problem for the NFT space?NFT wash trading is a problem for investors, the global community, collectors and traders because these participants use less liquid nonfungible tokens to manipulate the price of an asset.Due diligence has become more difficult as investors have been forced to rely on measurable statistics, making wrong investment decisions. To encourage NFT investments and prevent NFT scams, discrepancies in the data must be....
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Securities and Exchange Commission regulators should move to protect investors from traders who distort the NFT market with manipulative trades — and they probably will soon. Studies show that most people who attempt to wash trade nonfungible tokens (NFTs) are unprofitable. But that doesn’t stop them from trying, which makes it a glaring regulatory and enforcement issue for the industry. In wash trading, manipulators buy and sell an asset between themselves to create the appearance that the asset is in higher demand and, therefore, worth more than it would be otherwise. With NFTs, wash....
Chainalysis, one of the leading blockchain and cryptocurrency auditing firms, has issued a report indicating signs of significant wash trading activity involving NFTs. In these operations, some actors effectively sell their assets to themselves, with the intention of increasing the floor price of the NFTs to sell them at a higher price later. However, this wash activity has not always been profitable due to gas costs. Wash Trading Involving NFTs Is Real, Says Chainalysis A new report issued by Chainalysis, one of the leading auditing and tracking firms in crypto, has detected....
Findings from Chainalysis shows the NFT space to be prone to wash trading, but most traders are not profiting. Nonfungible tokens (NFT) have taken the world by storm, resulting in mainstream interest and greater adoption of cryptocurrency. According to blockchain analysis firm Chainalysis, NFT popularity skyrocketed in 2021. Chainalysis’ “NFT Market Report” shows a minimum of $44.2 billion worth of cryptocurrency sent to Ethereum smart contracts associated with NFT marketplaces and collections last year. The report notes that this number was $106 million in 2020.While impressive,....
Authorities in Hong Kong have arrested four people suspected of money laundering a total of $155 million through cryptocurrency wallets and bank accounts. The city’s customs agency said this was its first case in which virtual money had been used to launder dirty cash. Money Laundering Syndicate Recycles $155 Million in Crypto and Fiat Transactions The criminal group is believed to have processed illegal funds for a total of 1.2 billion Hong Kong dollars ($155 million), Hong Kong Customs announced Thursday. In an operation code-named “Coin Breaker,” officers detained the....
LooksRare aims to be an alternative to OpenSea, but the amount of wash trading on the platform raises questions on whether users really view it as a viable competitor. LooksRare made its debut on Jan.10 and the recently launched NFT marketplace has drawn a lot of attention, not only because its daily trade volumes were more than double Opensea’s on the second day of trading, but also because it has become the new playground for wash traders.Wash trading is a series of trading activities involving the same trader buying and selling the same instrument simultaneously, creating artificially....