Kaiko

Kaiko: Wash trading by DeFi issuers is still "widespread"

ChainCatcher news, according to Bloomberg, research firm Kaiko stated that the wash trading strategy used to enhance the value of the FBI-created token NexFundAI remains a common practice on decentralized exchanges (DEX) and can also be encountered on certain centralized exchanges.In a report on Thursday, Kaiko analysts indicated that their data shows that among over 200,000 assets on Ethereum DEX, many lack utility and are controlled by individuals; some token issuers are establishing short-term liquidity pools on the exchange Uniswap, controlling the liquidity in the pools and engaging in wash trading to attract other investors; once others enter, the issuers sell off the tokens, achieving returns of up to 22 times their initial Ethereum investment within about 10 days; this analysis reveals widespread fraudulent behavior among token issuers, extending beyond the scope of the FBI's NexFundAI investigation.Kaiko noted that certain centralized exchanges, such as HTX and Poloniex, also appear to have wash trading. According to Kaiko, these exchanges have the highest number of assets, with trading volume to liquidity ratios exceeding 100 times, which may be an indication of wash trading.Kaiko also stated, "We can also see that tokens such as meme coins, privacy coins, and low market cap altcoins often exhibit abnormally high trading volume to depth ratios." Taking the meme coin Pepe as an example, Kaiko found that "in 2024, there is a significant divergence in trading volume trends between HTX and other platforms. The PEPE trading volume on HTX remains high, even increasing in July, while the trading volume on most other exchanges has declined."
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