Imagine a digital art world where some people cheat! This news is about two bad things happening with NFTs (special digital pictures): wash trading and money laundering.
Wash trading is like pretending your NFT is super popular. You buy and sell it to yourself many times to make it seem more expensive. Then, you sell it to someone else for a much higher price.
Money laundering is using NFTs to hide money from illegal activities. They buy NFTs with this “dirty” money, sell them, and the money looks clean afterwards. It's like hiding dirty clothes in a clean laundry basket.
- Wash trading tricks people into thinking NFTs are worth more.
- Money laundering hides illegal money by using NFTs.
- Both are bad for the NFT market.
| Fact | Number |
|---|---|
| Estimated wash trading in LooksRare | $18 billion (95% of trade volume) |
| Impact Theory NFT sales (SEC case) | $30 million |
| Impact Theory refunds | $7.7 million |
