Solidus Labs Reports $2 Billion in Wash Trades on Decentralized Exchanges
Solidus Labs, a leading entity in crypto-native trade surveillance and risk monitoring, has recently unveiled that a minimum of $2 billion worth of cryptocurrency has been wash-traded on Ethereum-based decentralized exchanges (DEXs) since 2020. This revelation is part of Solidus Labs' latest Crypto Market Manipulation Report.
The study, which analyzed around 30,000 DEX liquidity pools, found that 67% of these pools were tainted by wash traders. These traders, often executing transparent or concealed self-trades, aim to artificially influence crypto tokens’ prices or volumes. Notably, wash trading represented 16% of the total trading volume in the manipulated pools. Given the sample size, this figure is a conservative estimate of the actual volume of DEX-based wash trading.
Asaf Meir, Solidus Labs’ Founder and CEO, commented on the findings, stating, «Market manipulation remains a significant challenge within the crypto industry, especially in an era of greater regulatory scrutiny and institutional adoption.» He further emphasized the need to curb such activities for the crypto and DeFi sectors to thrive.
The report, being the second in Solidus’ series on Crypto Market Manipulation, offers detailed data and instances of the primary wash trading techniques employed by wrongdoers. One such case highlighted by Solidus involved a coordinated group of wallets that manipulated the trading of a meme token, “SHIBAFARM.” This group attracted speculators, altered its price, and subsequently defrauded those speculators, making over $2 million in the process.
While traditional markets have mechanisms to address wash trading, the responsibility for detecting and preventing it on DEXs remains a regulatory gray area. In response to
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