"NFT Wash Trading Made Scammers at Least $9m in 2021"

Security researchers at Chainalysis have found that cybercriminals are making and laundering millions through non-fungible tokens (NFTs).  NFTs are technically unique records on a blockchain that are each linked to a piece of digital content.  They can be minted and sold by the content creator to investors, fans, and collectors.  NFTs soared in popularity last year.  The researchers stated that this surging market for NFTs also attracted fraudsters and cybercriminals.  The researchers claimed that so-called "wash trading" made scammers $8.9m last year.  Wash trading refers to a situation in which a seller is on both sides of a trade in order to mislead potential buyers about an asset's value and liquidity.  The security researchers stated that in the case of NFT wash trading, the goal would be to make one's NFT appear more valuable than it really is by 'selling it' to a new wallet the original owner also controls.  The researchers noted that, in theory, this would be relatively easy with NFTs, as many NFT trading platforms allow users to trade by simply connecting their wallet to the platform, with no need to identify themselves.  The researcher's analysis revealed 110 profitable NFT wash trades last year.  However, the actual figure for this volume and the profits made from the scams may be much higher, as Chainalysis only looked at activity using Ethereum and wrapped Ethereum (wETH) currencies.  The researchers are urging NFT marketplaces to clamp down on such activity.

Infosecurity reports: "NFT Wash Trading Made Scammers at Least $9m in 2021"