Detecting Wash Trading in Cryptocurrency
Faculty Mentor Information
Dr. Gaby Dagher, Boise State University; and Dr. Steven Cutchin, Boise State University
Presentation Date
7-16-2026
Abstract
Wash Trading remains a large concern for cryptocurrencies. Wash Trades happen when a buyer trades an asset with himself or with a trusted associate to artificially inflate the value of the asset. This market manipulation means that the victim buys the asset at a higher price than the actual value. It is important to detect Wash Trading because researchers have shown that wash trading is very common in today’s cryptocurrencies and it has been reported that millions of dollars have been lost because of wash trading. However, detecting wash trading is difficult because of the pseudo-anonymality of the buyer and the seller of the block chain for that cryptocurrency. It is imperative that we create algorithms to detect Wash Trading. In this paper, we introduce a framework and algorithms to quantify the characteristics of wash trading. Then visualize those characteristics in the context of the Non-Fungible Token Market as well as the Ethereum blockchain to illustrate suspicious events of wash trading.
Detecting Wash Trading in Cryptocurrency
Wash Trading remains a large concern for cryptocurrencies. Wash Trades happen when a buyer trades an asset with himself or with a trusted associate to artificially inflate the value of the asset. This market manipulation means that the victim buys the asset at a higher price than the actual value. It is important to detect Wash Trading because researchers have shown that wash trading is very common in today’s cryptocurrencies and it has been reported that millions of dollars have been lost because of wash trading. However, detecting wash trading is difficult because of the pseudo-anonymality of the buyer and the seller of the block chain for that cryptocurrency. It is imperative that we create algorithms to detect Wash Trading. In this paper, we introduce a framework and algorithms to quantify the characteristics of wash trading. Then visualize those characteristics in the context of the Non-Fungible Token Market as well as the Ethereum blockchain to illustrate suspicious events of wash trading.