Traders are Selling Their Own NFTs to Increase Prices

February 7, 2022
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According to a report issued this week by a blockchain analytics firm, the NFT marketplace is riddled with people buying their own NFTs to push up costs. The act of purchasing and selling securities to deceive the market, known as “wash trading,” was previously prevalent on Wall Street and has been unlawful for over a century. However, the huge, unregulated NFT sector has proven to be a goldmine for fraudsters.

It discovered a gang of 110 accused NFT wash traders who profited from this technique to the amount of $8.9 million. In the second half of 2021, researchers identified considerable evidence of money laundering in the NFT economy. According to the data, the value transmitted to NFT markets by addresses connected with scams increased dramatically in the third quarter of 2021, totaling moreover $1 million in cryptocurrency. In the fourth quarter of 2021, such unlawful addresses generated around $1.4 million in sales.The report’s authors wrote, “NFT wash trading exists in a murky legal area. While wash trading is prohibited in conventional securities and futures, wash trading involving NFTs has yet to be the subject of an enforcement action.”

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