Wash Trading and How to Avoid It: a Guide


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The cryptocurrency market is still very small, and is moving forward. It means that scammers still have many obstacles due to lack of laws. Corruption is detrimental to the market and to all participants. However, while such practices are prohibited, they do occur and can be difficult to detect.

In this article, we will look at one way to market ourselves – to market our products.

What Is Wash Trading?

Wash trading (WT) is a type of market change when an Investor or entity simultaneously sells and buys the same cryptocurrencies to create an active market, which, in turn, misleads other market participants.

For those who participate in the crypto market, such a scheme poses a serious risk. Mainly because no one can support fraudulent trade forever: soon, it will stop, which means that trade prices will fall sharply, leading to lower prices. Such reforms make the market more volatile, turbulent, and dangerous for beginners.

What Activities Are Taken As a Wash for Wash?

Wash trades can be done by a trader (seller) or a group of traders (partners) who buy and enforce their rules on a certain currency / token to create a speculative crypto trade said.

In other words, WT fraudulently increases the sales volume for any item sold on the exchange. Using WT techniques, one team becomes a buyer and seller. Such practices, coupled with the increase in the number of trades based on exchanges, will create the illusion that there are many trading platforms on the market.

What if I agree to order (buy and sell) to be executed simultaneously in the same cryptocurrency? With wash business?

According to the US Commodity Futures Trading Commission (CFTC) – it could also be used in the crypto market, market participants may be found to have deliberately participated in clearing trading if they have helped. washing the results without thoroughly checking the accuracy of the rules before executing them. Also, the failure of the market to sell such research can be considered as evidence of participation in the laundry business.

What if the account ownership is common but different? Will such stories be banned?

Common account holders often refer to the time when companies, businesses, or any other group participates in the market.

If account ownership is common but non-compliant (each party segment has less than 100% ownership), restrictions still serve as the purpose of the order is to ignore market risk or competition / price fluctuations.

Would I accept the exhortation to relinquish my position and re-create a new one?

You can terminate a position and re-create a new site if you do not want to be removed and reinstate the role that needs to be done at the same time.

When is it time to do business on your own in the order book and break it and it can be seen as a wash business?

Selling by yourself in the order book is a breach and can be considered as a bath sale if the market seller knew or knew that their system could be similar to a system on the other side of the market on an account with a profitable ownership.

Pansi Pansi

As for investors and traders, knowing the risks and ways to avoid them will save you a lot of money and help alleviate anxiety. Marketing positively and thoughtfully – not making decisions based on sudden market changes.

The Changelly PRO team has always struggled and will continue to fight the bath business to give users access to fair and transparent business space.


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