Solidus Labs, a leader in crypto-native trade monitoring and risk monitoring, recently announced that at least $2 billion worth of cryptocurrencies have been traded on Ethereum-based decentralized exchanges (DEXs) since 2020. This revelation is part of Solidus Labs’ latest crypto market manipulation report.
The study, which analyzed around 30,000 DEX liquidity pools, found that 67% of these pools were contaminated by wash traders. The aim of these traders is to artificially influence the prices or volumes of crypto tokens, often by conducting transparent or covert self-trading. Notably, wash trading accounted for 16% of the total trading volume in the manipulated pools. Given the sample size, this figure is a conservative estimate of the actual volume of DEX-based wash trading.
Asaf Meir, Founder and CEO of Solidus Labs, commented on the findings, saying: “Market manipulation remains a major challenge in the crypto industry, especially in a time of greater regulatory scrutiny and institutional acceptance.” He also emphasized the need to curb such activities in order to do so the crypto and DeFi sectors can flourish.
The report is the second in the Solidus series on crypto market manipulation and provides detailed data and examples of the key wash trading techniques used by bad actors. One such case highlighted by Solidus involved a coordinated group of wallets that manipulated trading of a meme token, “SHIBAFARM.” This group attracted speculators, changed their price, and then defrauded those speculators, earning over $2 million.
While traditional markets have mechanisms in place to combat wash trading, the responsibility for detecting and preventing wash trading on DEXs remains a regulatory gray area. In response to this challenge, Solidus Labs has proactively developed tools to detect and combat market manipulation. Their solutions, including Token Sniffer and DEX-based AA Wash Trading Detection, are gaining popularity among crypto exchanges, regulators and investors.
Solidus Labs is known for its monitoring software, as reported by Blockchain.News. Solidus Labs announced a strategic partnership with EDX Markets on August 10, 2023. EDX Markets, a well-known crypto exchange backed by major Wall Street firms, will integrate Solidus Labs’ HALO platform to improve transaction monitoring. This collaboration is in line with Solidus Labs’ mission to ensure secure crypto trading in both centralized and DeFi markets. Asaf Meir, Founder and CEO of Solidus Labs, expressed pride in supporting EDX’s vision and emphasized the importance of connecting traditional and digital finance with crypto-native risk mitigation tools. The aim of the partnership is to set higher standards for secure and integrity-oriented crypto trading.
About Solidus Labs
Solidus Labs is at the forefront of crypto-native market integrity solutions, offering services such as trade monitoring, transaction monitoring and threat intelligence. With a vision to promote secure crypto trading across all markets, both centralized and DeFi, Solidus is a trusted partner for crypto exchanges, financial institutions and regulators worldwide.
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