Saudi Press

Saudi Arabia and the world
Saturday, Aug 02, 2025

NFT fraudsters making millions by wash trading, new study finds

NFT fraudsters making millions by wash trading, new study finds

The amount of money pumped into the controversial digital assets has surged from £78m in 2020 to more than £44bn last year.

Fraudsters selling non-fungible tokens (NFTs) have made millions of pounds from artificially inflating the price of their token through wash trading, according to a new report.

NFTs have surged in popularity over the past year, with many people flocking to invest in what is marketed as a valuable and unique digital asset.

However, the value of these assets can be inflated by wash trading - the practice of trading the token between accounts owned by the seller to give a misleading view of its value and liquidity.

What are NFTs?


NFTs are a token of ownership attached to a blockchain. Their proponents claim they are a unique asset class while critics say the token is fundamentally valueless.

Despite the debate, more than $44bn (£32bn) worth of cryptocurrency was sent to NFT-related smart contracts last year, up from just $106m (£78m) in 2020, according to a new report published by Chainalysis.

Chainalysis, which offers a blockchain data platform for law enforcement and other organisations, has published a study identifying the scale of wash trading to artificially increase the value of NFTs.

Wash trading is a market manipulation tactic that gives the impression that a financial instrument is in more demand than it actually is by trading it for higher and higher prices between accounts operated by the same actor.

How big an issue is it?


Using blockchain analysis, the investigators have been able to identify hundreds of addresses that initially send funds to a buying address before then exchanging a token with that address for the funds it had originally sent.

However each of these transactions comes with a cost, and for many wash traders the cost has been greater than the ultimate revenue they brought in from trading the NFT to a victim who has overvalued the token.

Of 262 traders whose history was investigated by Chainalysis, 152 had ultimately made a collective loss from the practice of more than $416,000 (£306,000) - but the collective profits made by successful traders revealed that practice was immensely profitable overall.

Of the 110 traders who didn't lose money, the collective profit was greater than $8.8m (£6.5m) with those funds being "most likely derives from sales to unsuspecting buyers".

These victims "believe the NFT they are purchasing has been growing in value, sold from one distinct collector to another" when in fact they have just been traded between accounts controlled by the fraudster.

Chainalysis said it was likely there was wash trading that the company had not identified.

Although the practice is illegal in the US when it comes to conventional financial instruments, there has not yet been an enforcement action regarding NFTs which are a largely unregulated asset class.

Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Russia Formally Recognizes Taliban Government in Afghanistan
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Emirates Airline Expands Market Share with New $20 Million Campaign
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
Explosions Rock Doha as Iranian Missiles Target Qatar
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
×