It Looks Like A Massive Number Of NFT Sales Are Faked To Inflate The Market — Surprise!

  • It seems more likely than not at this point, that shifty traders are buying their own NFTs in an attempt to artificially inflate their prices — a deceptive tactic called “wash trading.”
  • The $1.3 billion total price tag from the 27 most expensive NFT sales in January came from only two crypto wallets trading on the NFT platform LooksRare — which belies the market’s purported meteoric rise in popularity.
  • Evidence is piling up that the NFT market has attracted several bad actors willing to do almost anything to make a quick buck. Regulators need to catch up with them, along with other blockchain-related assets.

Tony Tran from Futurism writes:

“Wash Out

If you’re completely confused why someone would pay tens of millions for a glorified JPG, you’re not alone. NFTs have seen a meteoric rise since bursting onto the scene early last year, and the trend has left many wondering why the hell buyers are shelling out so much for digital images.

Well, it turns out that a bunch of sales are actually sneaky traders buying their own NFTs in an attempt to artificially inflate their prices, in a tactic called “wash trading.” In fact, evidence is starting to build that shows that many of the most expensive NFT “purchases” are the result of the deceptive process.

For example, the 27 most expensive recorded NFT sales in January amounted to $1.3 billion — but came from just two crypto wallets trading on the NFT platform LooksRare, Reuters reports. Meanwhile, the top 100 sales that amounted to $2.3 billion came from just 16 wallets. 

“There is a lot of activity happening between a couple of wallets — let’s say wallet one selling to wallet two, and then wallet two reselling it,” Modesta Masoit, finance and research director of blockchain market data tracker DappRadar, told Reuters. “It’s quite likely that this is not real demand, that these trades are not organic…”

See full story here.

Categories: Business, Economy, Society, Tech

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