Wash Trading Is Rampant on Decentralized Crypto Exchanges
- Liquidity providers have manipulated prices of 20,000 tokens
- Solidus examined a sample of 30,000 pools on three exchanges
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Token price manipulation is rampant on Ethereum-based decentralized exchanges, where so-called wash trading amounted to at least $2 billion worth of crytocurrencies since September 2020, according to a study by researcher Solidus Labs.
Wash trading, a form of market price manipulation where a trader buys and sells a security, can involve token issuers and other parties selling a coin to themselves to boost its price and trading volume — and to make it a viable candidate for being listed on centralized exchanges.