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.

In the second part of its 2023 Crypto Market Manipulation Report 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 — making up for around $2 billion worth of crypto.

Wash trading is a form of market manipulation where an entity buys and sells the same asset giving the false impression of market activity.

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

Full details here in our report: https://t.co/pcRvMBGfb0

— Solidus Labs (@Solidus_Labs) September 12, 2023

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.”

There’s also an ongoing regulatory question over who is responsible for on-chain wash trading detection and prevention — likely given the borderless nature of decentralized finance.

“Market manipulation remains

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Author: Felix Ng

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