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Wash Trading

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Table of contents
    1. 0.2. How Wash Trading Works
    2. 0.4. Why Wash Trading Matters

Wash trading is a form of market manipulation where an investor buys and sells the same asset simultaneously or within a short period to create a false impression of high trading volume or price activity.

How Wash Trading Works

In wash trading, an individual or group of traders make multiple transactions in quick succession to artificially inflate the trading volume of an asset. This can mislead other market participants into thinking there is greater demand or market interest than there actually is, often to influence the price or attract more investors.

Why Wash Trading Matters

Wash trading is illegal in traditional financial markets and can distort the true value of an asset. In the crypto world, it undermines market integrity and can lead to price manipulation. For investors, identifying wash trading helps avoid deceptive practices and promotes transparency in crypto markets.