By Richard Hines
Mark Cuban, a crypto billionaire, has predicted that wash trading will cause a catastrophic breakout in the crypto market in 2023. He also predicted that most centralized exchanges will begin to engage in wash trading this year.
Wash Trading, The New Order
Wash trading is a market manipulation strategy in which a trader continually buys and sells his tokens in a time frame to generate a bogus pump in the market, luring investors to invest in this token.
This was widely used in the NFT sector, where a project owner would buy and sell his own NFTs multiple times within the same time frame to increase the floor price and trading volume, enticing investors to invest in this NFT.
According to a report from an analysis, 80% of the trading volume on unregulated exchanges was fake volume, implying that most exchanges engaged in wash trading to boost their trading volume.
Cuban recently shared his predictions for the market in 2023, slamming the centralized crypto exchanges and singling out some of the exchanges for indulging in wash trading.
He has advocated for increased surveillance of centralized exchanges in order to prevent wash trading, as this act alone might cause the market to turn upside down.
Predictions For 2023
According to Cuban Predictions, 2023 will be the year of crypto scandals, and he believes it is not a question of if, but of when.
He emphasized that the most obvious scandal that agencies and regulators should be on the lookout for is wash trading, which is progressively gaining popularity and significance in the crypto space.
In a recent interview, Cuban stated that there are many businesses that have zero utility and no feature for investors to invest in, yet nonetheless amass tens of thousands of volume and liquidity. How then do these projects obtain liquidity if they are not involved in wash trading?
Cuban went on to say that if this wash trading is eliminated, most businesses will fail and the crypto industry will suffer, since most projects and businesses rely on thia strategy to survive and bloom in the crypto space.
Wash trading is an illegal trading practice, although there are no regulations made concerning it.