General
wash trade
What does wash trade mean?
A trade where the same beneficial owner is on both sides, so no real risk or ownership changes hands. The point is purely to manufacture the appearance of volume or to print a price. Banned under the Commodity Exchange Act and a perennial enforcement target, especially now in crypto markets where wash trading has been used to fake exchange rankings and NFT floor prices.
"The exchange's reported volume was mostly wash trades between two accounts the founder controlled."
Frequently asked questions
What is a wash trade?
A wash trade is buying and selling the same security with no real change of ownership, just to fake activity. It creates a misleading impression of trading volume or interest.
Is wash trading illegal?
Wash trading is widely treated as illegal market manipulation because it fabricates activity to mislead other investors.
How do you use wash trade in a sentence?
"Regulators flagged the account for wash trades that pumped up the token's volume."
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