What Mark Cuban Warns The Next Major Crypto Scandal Will Be!
What Mark Cuban Warns The Next Major Crypto Scandal Will Be!
Billionaire and Shark Tank star Mark Cuban recently warned the crypto community on what the next major scandal and implosion in the industry will be, following the major collapse of FTX!
Next Crypto Implosion
In a recent interview with The Street, Cuban reveals that he believes the next biggest scandal to happen in the crypto industry will be the reveal of just how much wash trading happens on central exchanges.
Wash trading itself is the illegal practice of manipulating the market to inflate the price of a product, in this case a crypto token, in order to make a profit. According to Cuban, wash trading is such a massive issue in the crypto industry that it’s not a matter of whether these facts will be revealed to the public, but rather just a question of when.
“I think the next possible implosion is the discovery and removal of wash trades on central exchanges,” Cuban says, “There are supposedly tens of millions of dollars in trades and liquidity for tokens that have very little utilization. I don’t see how they can be that liquid.”
Mark Cuban cautions however that he “doesn’t have any specifics” to back up his prediction.
Related: Former Celsius Network CEO Sued For Defrauding Its Investors!
Massive Issue In Crypto
Although the act of wash trading is prominent in traditional finance as well, the crypto industry has been increasingly a popular way for people to do this illegal practice due to how much easier it is as well as the fact that the industry itself still lacks enough regulations for those who wash trade to get caught.
According to director of research at blockchain analytics firm Chainalysis, Kim Grauer, the act of wash trading in the crypto industry is still “a legal gray area that we’re all trying to figure out how this should be regulated and what’s illegal.”
A study by Forbes magazine back in 2022 showed that out of the 157 centralized cryptocurrency exchanges that they looked into, more than half the volumes of Bitcoin related transactions were considered to be fake.
“More than half of all reported trading volume is likely to be fake or non-economic,” the magazine concluded from their study.
Related: Why US Regulators Are Predicted To Double Down On Crypto In 2023!
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