A manipulative practice where a trader, or several colluding traders, simultaneously buy and sell the same asset. The goal is to create the illusion of high demand in order to inflate the price or lure in unsuspecting investors.
In traditional finance, wash trading is illegal and penalized by regulators (SEC, CFTC, etc.). While major crypto exchanges attempt to combat it, the rules are less clear in crypto: according to a 2022 Forbes report, more than 50% of reported Bitcoin trading volume came from wash trading.