The top six nonfungible token (NFT) exchanges saw an increase in pseudo trading for four consecutive months, with a total volume of IDR 8.4 trillion, in recent months, in a number of countries.
According to a recent report from CoinGecko, February 2023, it saw a 126% increase in the previous month's volume of IDR 3.6 trillion. The report calls the overall recovery of NFT market trading volume a reason for soaring trading. The NFT market reached trading volume of IDR 27 trillion in February.
Wash trading refers to manipulation of trading volume or price through repeated transactions.
The six exchanges included in the report are Magic Eden, OpenSea, Blur, X2Y2, CryptoPunks, and LooksRare. X2Y2, Blur, and LooksRare played their biggest role in the volume of wash trading in February, with Rp3.9 trillion (49.7%), Rp2.1 trillion (27.7%), and Rp1.1 trillion (15.1%), respectively. Previously, these exchanges provided incentives to users to increase trading volume through transaction prizes.
Two other exchanges, Magic Eden and OpenSea, reported trading wash of Rp. 8.3 million and Rp. 606.5 billion, respectively. Meanwhile, CryptoPunks did not see any NFT wash trading, according to reports.
The CoinGecko report reveals that NFT trading wash covers 23.4% of the "unadapted trade volume" in the industry's six largest exchanges.
While illegal wholesale trading in traditional financial markets, this problem can be found both in the crypto space in general and with NFT due to a lack of clear regulations.
In January, investor Mark Cuban said that wash trading would lead to the next "explosion" in the crypto market. Meanwhile, new artificial intelligence-based technology has emerged to deal with problems in the NFT market, including wash trading.
As Cointelegraph reported on March 16, a recent fraud emerged involving websites promoting fake BLUR airdrop tokens, resulting in theft of IDR 4.2 billion.
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