Crypto Exchanges Turn to AI to Combat Wash Trading and Market Manipulation

Crypto markets have long struggled with artificial trading activity, and wash trading is one of the most common forms of manipulation.

Wash trading occurs when a trader or group of traders buys and sells an asset between accounts they control to create the appearance of genuine market activity.

The problem is difficult to measure because suspicious activity does not always prove manipulation, but researchers have made significant progress in identifying unusual patterns using artificial intelligence (AI).

A 2025 analysis from Chainalysis estimated up to $2.57 billion in potential wash trading across Ethereum, BNB Chain, and Base during 2024.