Wash Trading on Ethereum, BNB Chain, and Base Surpasses $2.57 Billion in 2024, Chainalysis Reports

Wash Trading on Ethereum, BNB Chain, and Base Surpasses $2.57 Billion in 2024, Chainalysis Reports

According to a recent analysis by blockchain forensics firm Chainalysis, wash trading activity on Ethereum, BNB Chain, and Coinbase’s Base totaled an estimated $2.57 billion in 2024.

In a blog post published on January 29, Chainalysis revealed that nearly 3 million tokens were launched across various networks throughout the year. Of these, approximately 1.3 million (over 40%) were listed on decentralized exchanges (DEXs). However, despite the high number of listings, only a small fraction (1.7%) of these tokens have seen any trading activity in the past 30 days.

The report suggests that this low activity rate may be due to a significant number of tokens being abandoned shortly after creation. Chainalysis speculates that some of these tokens were likely created as part of short-lived fraudulent schemes, such as pump-and-dumps or rug pulls.

“It is also possible that some of these tokens facilitate intentional short-lived schemes designed to exploit initial hype before fading away, also known as pump-and-dumps or rug pulls,” Chainalysis noted.

Pump-and-Dump Schemes and Rug Pulls on DEXs

Chainalysis also highlighted concerning trends within decentralized exchange liquidity pools. The report found that nearly 90% of DEX pools suspected of being involved in pump-and-dump schemes were ultimately rugged by the address that initially created the pool. The remaining cases were rugged by addresses that had been funded by the pool or token creator.

Interestingly, in some instances, the pool creator and the address responsible for rugging appeared to be funded by the same source, suggesting a coordinated effort to deceive and exploit users.

Massive Wash Trading Across Major Networks

Beyond fraudulent token schemes, Chainalysis identified a staggering $2.57 billion in wash trading activity on Ethereum, BNB Chain, and Base in 2024. The firm noted that it employed various methodologies to detect different forms of wash trading across these networks.

As the crypto space continues to evolve, these findings highlight the persistent risks faced by traders and investors navigating decentralized markets. The prevalence of pump-and-dump schemes, rug pulls, and wash trading underscores the need for stronger oversight and due diligence within the Web3 ecosystem.