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Mark Cuban Warns About Wash Trading

In an interview with TheStreet, Mark Cuban questioned the credibility of certain trading volumes in the crypto market.

By Finst News
• 2 min read
Mark Cuban Warns About Wash Trading

In an interview with TheStreet, Mark Cuban raised questions about the credibility of certain trading volumes in the crypto market. He said they are artificially inflated by the so-called "wash trading". The entrepreneur and Bitcoin advocate believes this form of market manipulation primarily targets central exchanges.

"I think the next potential wipeout will be the uncovering and elimination of wash trades on centralized exchanges," Cuban said, adding: "There are probably tens of millions of dollars worth of trades and liquidity for tokens that see very little use. I don't understand how they can be that liquid."

Wash trading is an illegal practice where an artificial stake in a financial asset is created. The fraudster buys and sells the same asset, inflating trading volume artificially.

In this context the U.S Commodity Futures Trading Commission: "Wash trading is the practice of entering into transactions where purchases and sales are made without taking market risk into account, and where the trader's market position has not changed."

Cuban believes wash trading will pose big challenges for the crypto sector in 2023, but concedes: "I don't have concrete data to back up my guess."

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