Solidus Labs Reports $2 Billion in Wash Trades on Decentralized Exchanges

Solidus Labs, a leading entity in crypto-native trade surveillance and risk monitoring, has recently unveiled that a minimum of $2 billion worth of cryptocurrency has been wash-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 tainted by wash traders. These traders, often executing transparent or concealed self-trades, aim to artificially influence crypto tokens’ prices or volumes. Notably, wash trading represented 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, Solidus Labs’ Founder and CEO, commented on the findings, stating, “Market manipulation remains a significant challenge within the crypto industry, especially in an era of greater regulatory scrutiny and institutional adoption.” He further emphasized the need to curb such activities for the crypto and DeFi sectors to thrive.

The report, being the second in Solidus’ series on Crypto Market Manipulation, offers detailed data and instances of the primary wash trading techniques employed by wrongdoers. One such case highlighted by Solidus involved a coordinated group of wallets that manipulated the trading of a meme token, “SHIBAFARM.” This group attracted speculators, altered its price, and subsequently defrauded those speculators, making over $2 million in the process.

While traditional markets have mechanisms to address wash trading, the responsibility for detecting and preventing it on DEXs remains a regulatory gray area. In response to this challenge, Solidus Labs has been proactive in developing tools to identify and counteract market manipulation. Their solutions, including Token Sniffer and DEX-based A-A Wash Trading Detection, are gaining traction among crypto exchanges, regulatory bodies, 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 prominent crypto exchange supported by major Wall Street firms, will integrate Solidus Labs’ HALO platform to enhance its transaction monitoring. This collaboration is in line with Solidus Labs’ mission to ensure safe crypto trading across both centralized and DeFi markets. Asaf Meir, Solidus Labs’ Founder and Chief Executive, expressed pride in supporting EDX’s vision, emphasizing the importance of bridging traditional and digital finance with crypto-native risk mitigation tools. The partnership aims to set higher standards for secure and integrity-driven crypto trading.

About Solidus Labs

Solidus Labs stands at the forefront of crypto-native market integrity solutions, offering services like trade surveillance, transaction monitoring, and threat intelligence. With a vision to promote safe crypto trading across all markets, both centralized and DeFi, Solidus is a trusted partner for crypto exchanges, financial institutions, and regulators worldwide.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Crypto Risk Platform Solidus Labs Hires Former CFTC Commissioner Dawn Stump as Strategic Advisor

Solidus Labs, a New York-based crypto risk monitoring firm, announced on Tuesday that it has appointed Dawn Stump, a former commissioner of the U.S. Commodity Futures Trading Commission (CFTC), as the company’s strategic advisor.

Stump will offer advice and support the company’s regulatory engagement and policy development strategy in her role.

Established in 2018 by former Goldman Sachs engineers, Solidus Labs is a digital asset risk surveillance firm that offers regulatory risk and compliance services.

Stump is a seasoned leader in domestic and international financial services regulation. She comes to Solidus Labs with a wide experience in capital markets and policy. Formerly, Stump served as Commissioner of the CFTC under the Obama and Trump administrations. During her time as a commissioner, she sought to educate investors about the crypto regulatory landscape.

Stump talked about her appointment: “I’m delighted to work with the Solidus Labs team, which shares my deep commitment to enabling the potential of crypto, DeFi and digital assets by mitigating the new risks they pose to investor protection and market integrity. I look forward to advising the team and supporting Solidus’ combined focus on building tailored risk monitoring tools that address crypto’s unique market integrity challenges while also working with the industry and regulators to advance dialogue and innovative approaches to policy and regulation.”

Stump joins several other former regulators who serve as advisors to Solidus Labs, including former CFTC Chair J. Christopher Giancarlo, former SEC Commissioner Troy Paredes, former Acting Comptroller of the Currency Brian Brooks, Former LabCFTC Director Daniel Gorfine, and former Hong Kong Securities and Futures Commission Innovation and Licensing leader Clara Chiu.

Beefing Up Compliance

The above appointments happen when several crypto firms are rushing to bring on former regulators.

In August last year, Donald Trump’s SEC Chair Jay Clayton joined the $2 billion crypto platform Fireblocks.

In February last year, Ripple hired Barack Obama’s SEC Chair, Mary Jo White, to defend the firm against a lawsuit from her former agency.

Last year, Binance onboarded a small army of former regulators — including former Senate Finance Committee chair Max Baucus and IRS criminal investigator Greg Monahan, among others in response to rapidly mounting regulatory concerns on the exchange.

As the digital assets industry tries to insulate, more hires may be ahead.

The influx of former regulators jumping into the crypto markets coincides with the fast-paced growth digital assets industry that has been luring bankers for years.

Former regulators are dipping their toes in the still young industry, drawing on their experience to introduce and enforce new rules in a market facing increasingly loud calls for regulatory intervention.

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Surveillance Firm Launches Launches Push Towards Crypto Market Safety With 16 Other Industry Leaders

New York-based crypto surveillance firm Solidus Labs is teaming up with leading digital asset exchanges, trading firms and industry associations to launch a new crypto market safety initiative.

In a statement, the Crypto Market Integrity Coalition (CMIC) outlines how it will make the crypto market a safer space amid the emergence of new risks.

“The market integrity pledge introduced by the coalition is focused on a commitment to continuously strive towards higher standards of market integrity, risk monitoring, consumer protection and compliance, in order to maintain fair and orderly digital asset markets and prevent market abuse. “

The initiative also wants to engage with regulators to address the challenges in the industry.

“Over time, the coalition will take further steps, including advancing training programs, sharing insights and research, dialoguing with regulators, and considering data-sharing and shared-surveillance frameworks that can address crypto and decentralized finance’s unique cross-market supervision challenges.”

Solidus Labs initiated the formation of the group and co-founded the coalition with 16 other industry leaders, namely Coinbase, Circle Internet Financial, GSR, Huobi Tech, Anchorage Digital, CrossTower, BitMex, Bitstamp, Securrency, Elwood Technologies, CryptoCompare, MV Index Solutions, Global Digital Finance, the Chamber of Digital Commerce, CryptoUK, and Liberty City Ventures.

The CMIC says it is inviting other members of the crypto community to join the coalition.

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Featured Image: Shutterstock/Oceloti/Natalia Siiatovskaia


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