Bloomberg: 95% of trading volume on the NFT marketplace LooksRare linked to wash trading

Since its launching, the platform has processed around 106 000 transactions totaling $22,2 billion, according to CryptoSlam

05.04.2022 - 15:30

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What’s new? Approximately $18 billion of trading volume or 95% of the activity on the LooksRare NFT marketplace is linked to wash trading, Bloomberg reports, citing analytics platform CryptoSlam. Some lawyers believe that the wash trading that drives the growth of volumes on the LooksRare platform is illegal. Lawyer David Silver has called the platform’s user activity a form of market manipulation. This is when an investor simultaneously sells and buys the same instrument to create artificial activity in the market. LooksRare’s representatives have not yet commented on the allegations against them.

Bloomberg’s material

What is wash trading? Such trading is considered the senseless movement of funds between users’ accounts. As a rule, such transactions do not make economic sense and are considered fictitious. Often the buyer and seller’s addresses belong to the same person. Such a scheme is designed to artificially increase the demand and value of a digital asset. In addition, the trading platform benefits from the fees charged for each transaction.

What is known about LooksRare? It is an NFT marketplace that was launched in January 2022 by anonymous developers. The platform has a native token, Looks. LooksRare’s fees are distributed to Looks holders.

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