Solidus Labs Reveals $2 Billion Worth of Cryptocurrency Wash-Traded on Ethereum DEXs
A recent report by Solidus Labs, a leading crypto-native trade surveillance and risk monitoring firm, has exposed that at least $2 billion worth of cryptocurrency has been wash-traded on decentralized exchanges (DEXs) built on the Ethereum network since 2020. The study analyzed around 30,000 DEX liquidity pools and found that 67% of them were tainted by wash traders. These traders engage in self-trades to artificially manipulate the prices or volumes of crypto tokens. The report also revealed that wash trading accounted for 16% of the total trading volume in the manipulated pools. Solidus Labs emphasized the need to address market manipulation within the crypto industry to foster growth and regulatory compliance.
Coordinated Group Manipulates Meme Token Trading
One notable case highlighted in the report involved a coordinated group of wallets that manipulated the trading of a meme token called “SHIBAFARM.” By altering its price, the group attracted speculators and defrauded them of more than $2 million. Traditional markets have measures in place to combat wash trading, but the responsibility of detecting and preventing it on DEXs remains uncertain. To address this challenge, Solidus Labs has developed tools such as Token Sniffer and DEX-based A-A Wash Trading Detection, which are gaining popularity among crypto exchanges, regulatory bodies, and investors.
Solidus Labs’ Partnership with EDX Markets to Enhance Transaction Monitoring
Blockchain.News previously reported that Solidus Labs partnered with EDX Markets, a prominent crypto exchange supported by major Wall Street firms, to integrate Solidus Labs’ HALO platform for enhanced transaction monitoring. The collaboration aims to establish higher standards for secure and integrity-driven crypto trading. Asaf Meir, Solidus Labs’ Founder and CEO, expressed pride in supporting EDX’s vision and emphasized the importance of bridging traditional and digital finance with crypto-native risk mitigation tools.
About Solidus Labs
Solidus Labs provides crypto-native market integrity solutions, including trade surveillance, transaction monitoring, and threat intelligence. The company is committed to promoting safe crypto trading across all markets, both centralized and decentralized, and serves as a trusted partner for crypto exchanges, financial institutions, and regulators worldwide.
Hot Take: Combatting Wash Trading and Ensuring Market Integrity
The revelation that $2 billion worth of cryptocurrency has been wash-traded on Ethereum DEXs highlights the ongoing challenge of market manipulation in the crypto industry. With the increasing regulatory scrutiny and institutional adoption, it is crucial to address this issue to foster trust and growth. Solidus Labs’ report exposes the prevalence of wash trading and emphasizes the need for effective surveillance and risk monitoring tools. By developing solutions like Token Sniffer and DEX-based A-A Wash Trading Detection, Solidus Labs is helping to detect and prevent market manipulation. Additionally, their partnership with EDX Markets demonstrates the importance of collaboration between traditional and digital finance to establish higher standards for secure and integrity-driven crypto trading.
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