NFT laundering trading is a problem for investors, the global community, collectors, and traders because these participants use less liquid, non-fungible tokens to manipulate the price of an asset.
Due diligence has become more difficult as investors have been forced to rely on measurable statistics, making the wrong investment decisions. To encourage investments in NFTs and prevent NFT scams, specialists should investigate data discrepancies. Furthermore, NFT crimes affect the NFT community the most. Regulators and advocates of major financial services can now use wash trading to combat decentralization.
Collectors and dealers are also unable to make an informed judgement. When misleading facts and history mislead people about a piece of art or collectible, it's easy for them to make rash decisions. So since NFT markets are affected by wash trading, is there a way to detect it in the first place?
There is no price or volume history associated with new coins when they are introduced to the market. As a result, developers or other insiders may engage in laundering operations to mislead participants about the real value of the coin. Therefore, avoid investing in such projects.
Also, many NFTs have no trading volume and no investor interest. As a result, NFT owners can easily engage in laundering trading to lure unsuspecting buyers into buying the NFT at an exorbitant price. Therefore, avoiding small-cap cryptocurrencies and newly issued NFTs is the most important way to avoid wash trading.
A trader should choose more established cryptocurrencies with higher volume to avoid being a victim of laundered trades. The broader the market, the more money scammers will need to manipulate it. For example, already established cryptos like Bitcoin (BTC) or Ethereum, which are worth hundreds of billions of dollars, make crimes like money laundering incredibly challenging.
