Analytical company Chainalysis has recently reported “significant” volumes of fake trading in the NFT market and an influx of illegal assets for laundering.
According to the analysts of the company, wash trading or fake trading is commonly used in the markets to create false activity. In the case of NFTs, attackers are reportedly trying to create an unjustified feeling among users that the asset is liquid and growing in price.
They have tracked illegal practices through the analysis of sales between “self-funded” addresses—the funds for the purchase came from one to another or from a related source.
The analysis has revealed hundreds of fraudulent transactions. The most prolific fictitious NFT trader made 830 sales. In total, the company has identified 262 users who sold NFTs to self-funded addresses more than 25 times.