The crypto market is hot. But is it an illusion?

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• 00:00

  NPR.

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  The cryptocurrency market has been especially frothy in recent months.

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  According to CoinDesk, trading activity on crypto exchanges clocked in at $9.7 trillion last month.

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  To put how much that is in perspective,

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  that makes it the busiest month for crypto trading this year and almost twice as busy as the same time last year.

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  But what if a lot of this trading activity is an illusion?

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  And what if it's really a smoke screen for fraud?

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  This is The Indicator for Planet Money.

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  I'm Adrian Ma.

• 00:42

  And I'm Waylon Wong.

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  A few years ago, we did an episode on an emerging practice in the crypto market called wash trading.

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  Today on the show,

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  we'll look at how the practice is evolving and what regulators are doing about it.

• 00:59

  Most crypto trading happens on platforms that are unregulated by government watchdogs.

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  And according to a 2023 study done by researchers in the UK, US, and China,

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  about 70% of trading that happens on these unregulated platforms is actually wash trading.

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  Leah Foley is US attorney for the district of Massachusetts,

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  and she explains wash trading like this.

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  Wash trading occurs when a single trader or a number of traders working in coordination buy and sell the same asset to generate misleading market information.

• 01:32

  All right.

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