Chainalysis, one of the main crypto auditing and tracking businesses, has discovered “substantial” wash activity in the NFT market, according to a recent research. The goal of these operations is to increase the value of an NFT by creating the appearance of previous sales. The business was able to identify 262 users who have sold NFTs to self-funded addresses more than 25 times using blockchain research.
This operation has been performed over 800 times at the most active address in these activities, however it has not generated particularly positive returns for its owner or owners. The cost of transactions to allow these movements was much more than the revenue obtained from the sales due to petrol fees. The address has lost over $8K, according to the study.
However, when seen as a whole, the wash trading activity involving NFTs has been profitable, with numerous addresses earning millions. Wash trade profited more than $8,800,000 for 110 addresses participating in these actions, according to the business.
According to the business, the legal status of wash trading in NFT marketplaces is unclear. As stated by chainalysis:
“NFT wash trading exists in a murky legal area. While wash trading is prohibited in conventional securities. The, the futures, wash trading involving NFTs has yet to be the subject of an enforcement action.”
However, as it grow more widespread, this may alter. Wash trading may begin to attract the attention of authorities throughout the world as the use of NFTs explodes in 2021. , and numerous corporations begin to integrate it into their business models.
Money laundering via NFT also found in small amounts, usually from scam-related addresses, according to the business. This action, according to Chainalysis, is a “drop in the bucket”
compared to the amount of money laundered with bitcoin in 2021.
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