Decentralized exchanges saw $2 billion worth of wash trades over the past three years, according to market surveillance firm Solidus Labs.
Wash trades are present in traditional finance, however, Solidus argued market manipulators often have easier means to do so when it comes to crypto.
“In crypto, liquidity is fragmented across a variety of centralized and decentralized exchanges, resulting in smaller markets that are easier to manipulate.”for on-chain wash trading detection and prevention — likely given the borderless nature of decentralized finance. "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.
"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.”; to speculators attempting to game an upcoming token airdrop; to exchange and marketplace operators reporting higher trading volumes to attract investors and users.
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