Chainalysis report reveals signs of significant wash trading activity involving NFTs.
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A new report issued by Chainalysis, one of the leading auditing and tracking firms in crypto and blockchain, has detected “significant” wash activity in the NFT market. These activities aim to make an NFT more valuable by giving the appearance of previous sales. Using blockchain analysis, the company was able to detect 262 users that have sold NFTs to self-funded addresses more than 25 times.
110 addresses involved in these activities made more than $8,800,000 in profit from wash trading.
According to the report, the most active address in these activities has done this procedure over 800 times, but it has not yielded very good results for its owner or owners. Due to gas fees, the price of transactions made to allow these movements was significantly higher than the benefit obtained for the sales. According to the report, the address has lost over $8K. However, the wash trading activity involving NFTs has been profitable if viewed as a whole, with several addresses earning millions. The report found that 110 addresses involved in these activities made more than $8,800,000 in profit from wash trading.
The legal status of wash trading in NFT markets is not clear.
According to the analysis firm, the legal status of wash trading in NFT markets is not clear. Chainalysis noted, “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.” This could change as NFTs become more and more popular. With the explosion of NFTs last year, and several companies beginning to integrate NFTs into their business models, occurrences of wash trading could begin to catch the attention of regulators around the world.
Cryptocurrency
