Kaiko: DeFi Issuer Wash Trading Still “Widespread”

Wash trading, a strategy used to boost the value of the FBI-created token NexFundAI, remains a common practice on decentralized financial exchanges (DEX) and can be encountered on some centralized exchanges, research firm Kaiko said Oct. 18, according to Bloomberg. Kaiko analysts said in a report on Thursday that its data shows that many of the more than 200,000 assets on Ether DEX lack utility and are controlled by individuals; some token issuers are creating short-term pools of liquidity on the exchange Uniswap, where they control the liquidity in the pools and engage in wash trading to attract other investors; as soon as other people come into the picture, the issuer sells the tokens for gains of up to 22 times their initial ethereum investment in approximately 10 days; this analysis reveals widespread fraud among token issuers that extends beyond the scope of the FBI's NexFundAI investigation.