Cryptocurrency Wash Trading Reaches Estimated $2.57 Billion in 2024

According to a recent analysis by Chainalysis, wash trading on Ethereum, BNB Chain, and Coinbase’s Base has reached an estimated $2.57 billion in 2024. The blockchain forensic firm also claims that nearly 5% of all tokens launched across various networks in 2024 exhibited patterns similar to pump-and-dump schemes.

In 2024, more than 3 million tokens were launched, with nearly 1.3 million (over 40%) listed on decentralized exchanges. Despite this, only a small fraction – just 1.7% – has been actively traded in the last 30 days. This gap could be attributed to the fact that many tokens were “abandoned shortly after creation,” possibly due to lack of interest.

It is also possible that some of these tokens facilitate intentional short-lived schemes designed to exploit initial hype before fading away, also known as pump-and-dumps or rug pulls.

Pump-and-Dump Schemes and Rug Pulls

Nearly 90% of decentralized exchange pools suspected of being involved in pump-and-dump schemes were “rugged” by the address that created the DEX pool. The rest were rugged by addresses funded by the pool or token creator. In some cases, the pool creator and the address that rugged the pool seemed to be funded by the same source, suggesting a coordinated effort to exploit users.

Wash Trading Volume

The wash trading volume across Ethereum, BNB Chain, and Coinbase’s Base reached about $2.57 billion in 2024. Chainalysis notes that they used “different methodologies” to detect various types of wash trading.

For investors and traders, it’s essential to be aware of these tactics and take necessary precautions to avoid falling victim to pump-and-dump schemes and rug pulls. Here are some tips:

  • Conduct thorough research on the token and its creators before investing.
  • Be cautious of tokens with unusually high trading volumes or price fluctuations.
  • Avoid investing in tokens with unclear or misleading information.
  • Keep an eye on the token’s trading activity and be prepared to exit the market if you suspect a pump-and-dump scheme or rug pull.

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