Wash Trading: What It Is & Why It’s Important
Intermediate
Trading
Feb 20, 2022
10 min read
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Wash trading is when a trader or investor buys and sells the same security within a short window in an effort to mislead other market participants about the price or liquidity of an asset. Within the securities markets wash trading is illegal, but there are yet to have set regulations within the crypto industry.
In this article, we’ll discuss what wash trading is, how it works, where it’s commonly used within crypto markets — and how to avoid falling prey to it.