Wash Trading
Wash trading is the illegal practice of buying and selling the same asset simultaneously to create artificial trading activity. It inflates volume figures, manipulates prices, and misleads other traders about genuine market interest. Common in unregulated crypto exchanges.
Understanding the Concept
• Illegal in regulated securities markets • Creates illusion of liquidity and demand • Used to manipulate rankings on crypto exchanges • NFT market particularly susceptible (trading with yourself for volume)
Real-World Example
An exchange offers trading fee rebates based on volume. A trader programs bots to buy and sell the same token to themselves thousands of times. They generate $10M in fake volume, collect rebates, and make the token appear popular. Retail traders see high volume and mistakenly assume genuine interest.
How Strykr Helps
Strykr tracks Wash Trading developments across the crypto ecosystem. Our AI provides real-time insights and alerts to help you navigate the market with confidence.
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