Fake Trades Are Common on Decentralized Crypto Exchanges, Report Says

Backers of the growing breed of “decentralized” crypto exchanges say they’re more trustworthy and transparent than markets such as FTX and Binance. A new report suggests they suffer from some of the same problems.

The report from software firm Solidus Labs focused on wash trading—transactions orchestrated by a single trader or group to generate the appearance of trading activity and, typically, manipulate prices.

In its simplest form, wash trading involves selling an asset back and forth between two accounts controlled by the same person. The practice is banned in traditional markets, such as stocks.