Increasing scams and fraudulent activities have infiltrated the NFT space. For instance, NFT marketplace OpenSea recently announced that its free minting tool was prone to misuse. As a result, OpenSea shared that 80% of NFTs created using this tool were either plagiarized, fake or spam. If that wasn’t bad enough, Chainalysis’ also found that the NFT sector is vulnerable to wash trading and money laundering.
Wash trading refers to a transaction in which a seller is on both sides of the trade to paint a misleading picture of an asset’s value and liquidity. Most recently, data generated from the LooksRare NFT marketplace found the platform to be very prone to wash trading.
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