What is Wash Trading?

Wash trading is a form of market manipulation whereby a security or other asset is bought and sold with the intent to portray misleading market information. Wash trading is often facilitated by a trader and broker colluding to gain substantial profits. Other times, wash trading is executed by a single entity acting as both a buyer and seller of an asset to manipulate its price, or to show substantially increased trading volume compared to the actual amount that is really being traded. Wash trading can also be carried out by trading firms, brokers, and cryptocurrency exchanges.