In the virtual digital world, every transaction is accompanied by countless risks and opportunities. Recently, Mark Cuban's warning sounded like a long alarm bell, warning that the trading volume of junk coins has soared to more than $1 million, and trading volume fraud may become the next crypto mine. Let's delve into this fascinating topic and reveal the inside story and risks.

 Warning signal: junk coin trading volume soars

Mark Cuban's latest data reveals a shocking fact: the trading volume of junk coins has exceeded the $1 million mark. This figure is eye-catching because junk coins usually refer to those low-value, high-risk cryptocurrencies, which often hide all kinds of fraud and manipulation. As trading volume continues to rise, investors can't help but become vigilant, worrying that this may be just the tip of the iceberg, and trading volume fraud may become the next detonation point in the crypto market.

 The dark side of the crypto world: trading volume fraud

Trading volume fraud, as a common fraud method in the crypto world, aims to manipulate market prices through fictitious trading volume to obtain illegal profits. This behavior often misleads investors into believing that a certain digital currency has huge trading activity and market demand, and then they are forced to follow suit and buy, and eventually become victims of fraudsters. Junk coins are often one of the important tools for trading volume fraud. Because of their large price fluctuations and weak supervision, they are more easily manipulated and exploited.

 Common methods of trading fraud

In the crypto world, trading fraud methods are varied and endless. Among them, manipulating market prices by fictitious trading volume is one of the most common and cunning means. Fraudsters will take advantage of the weak liquidity and lax supervision of exchanges to create illusions through large transactions, thereby inducing other investors to follow suit. Once the market atmosphere is hyped up, many investors often find it difficult to remain rational and make wrong decisions due to emotions.

 Risks abound: Investors need to remain vigilant

Faced with the potential risk of trading volume fraud, it is crucial for investors to remain vigilant. First of all, we must learn to distinguish between junk coins and high-quality digital currencies, and not be confused by false trading volume and market hype. Secondly, we must remain rational and calm, and not blindly follow the trend. Only rational investment can avoid falling into fraud traps. The most important thing is to always pay attention to market dynamics, adjust investment strategies in a timely manner, and avoid being led by fraudsters.

 Conclusion: The alarm bell is ringing, and rational investment is the best

Mark Cuban's warning is like a mirror, allowing us to see the dark side of volume fraud in the crypto world. In this turbulent digital currency market, it is crucial to remain vigilant and invest rationally. Only by insight into the market and rational thinking can we avoid various traps on the road to investment and gain real wealth and achievements. Let us jointly maintain the bottom line of rationality, stay away from fraud traps, and jointly create a bright future for the crypto world.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

120Btc.com: The cryptocurrency market was hit by a series of scandals last year, including the collapse of Luna and UST, the bankruptcy protection of well-known institutions such as Three Arrows Capital, Celsius Network, and Voyager
Digital due to liquidity crisis, and the collapse of FTX, which resulted in millions of investors being victims. These events have severely hit market confidence.

In an interview with The
Street on the 5th, Mark Cuban, owner of the NBA Dallas Mavericks, believed that the cryptocurrency industry will also be full of scandals in the new year: I think the next possible implosion is the discovery and removal of "wash trading" on centralized exchanges. It is speculated that there are tens of millions of dollars in token transactions and very low liquidity utilization. I don't understand how there can be such high liquidity. But I don't have any specific details to support my guess.

Cointelegraph reported that under US law, wash trading is illegal. Traders or robots buy and sell the same cryptocurrency and provide misleading information to the market. The purpose is to artificially expand trading volume so that retail investors can chase and push up the price of the currency. In essence, this is a pump-and-dump scam.

The National Bureau of Economic Research (NBER) released a report in December last year, pointing out that in unregulated exchanges, up to 70% of the trading volume is wash trading. Researchers use statistics and behavioral patterns to determine which transactions are legitimate and which transactions are fake.

Forbes also released a study in August last year, pointing out that after investigating 157 exchanges, it was found that more than half of the exchanges' Bitcoin trading volume may be fake. On June 14 last year, Bitcoin's daily trading volume was US$128 billion, far lower than the total claimed trading volume of US$262 billion by all exchanges.

It is worth noting that until now, the data of Bitcoin trading volume by various data companies are different, which shows that transparency is still a big problem. The latest data shows that the Bitcoin trading volume displayed on CoinMarketCap in the past 24 hours is US$14 billion, Coingecko is US$15.4 billion, Nomics is US$21.2 billion, and Messari is US$3.52 billion.

There are also wash trading in the NFT market

In fact, wash trading does not only appear on centralized exchanges. Mati Greenspan, CEO of Quantum Economics and former senior market analyst at eToro, revealed on the 5th that 42% of NFT transactions are wash trading, and wash trading is also used to perform tax saving operations.