Reported by Jennifer Sor

Decentralized crypto exchanges are a hotbed for a certain type of fraud known as wash trading, according to a new report from Solidus Labs.

The blockchain research firm found that at least $2 billion worth of cryptocurrency on ethereum-based decentralized exchanges have been wash traded since September 2020. The fraudulent practice has manipulated the price and volume of about 20,000 tokens on DeFi exchanges, the firm said.

Wash trading is a form of market manipulation where fraudulent parties are essentially trading when themselves to artificially boost the price of a crypto token and give the illusion of liquidity, which piques the interest of other crypto investors.

The trends runs contrary to the general perception of DeFi exchanges, which are seen by some investors as a safer alternative compared to centralized exchanges like FTX and Binance, which are sometimes viewed as less transparent.

Read full report: https://markets.businessinsider.com/news/currencies/defi-crypto-exchange-token-wash-trading-fraud-price-manipulation-2023-9