According to a report released this week by blockchain data firm Chainalysis, users are buying their own NFTs to drive up prices on the NFT market. The act of purchasing and selling securities to deceive the market, known as “wash trading,” was previously popular on Wall Street but has been outlawed for over a century. The enormous, uncontrolled NFT market, on the other hand, has proven to be a gold mine for con artists.

The investigation identified at least 25 instances of the same traders selling the identical NFTs back and forth, indicating wash trading. It identified a gang of 110 accused NFT wash traders who had profited from the activity to the tune of $8.9 million. In the second half of 2021, researchers identified considerable evidence of money laundering in the NFT market. According to the research, the value transferred to NFT marketplaces by scam addresses increased dramatically in the third quarter of 2021, totalling moreover $1 million in cryptocurrency. Illicit addresses accounted for roughly $1.4 million in sales in the fourth quarter of 2021.

The report also states that NFT wash trading operates in a gray area of the law. While wash trading in traditional securities and futures is forbidden, wash trading in NFTs has yet to be the subject of an enforcement action.

NFTs, or non-fungible tokens, are a new asset type of blockchain-based digital tokens that are largely purchased with Ethereum, a cryptocurrency. Anything from a two-dimensional image to a GIF to music can be used as crypto collectable. The value of the NFT market is projected to range from $7 billion to $41 billion. Celebrities such as Mark Cuban, Tom Brady, and Reese Witherspoon have adopted digital assets, which increased in popularity in 2021. Other Celebrities like Snopp dogg, Jimmy Fallon, Lionel Messi have also hopped on the NFTs moving train.

As the still relatively new area has grown in prominence, many have questioned the authenticity and necessity of NFTs. High-profile NFT purchases, such as the $69 million acquisition of the artist Beeple’s collection last year, have become more common. However, because digital tokens are not securities, they are not subject to the same laws and regulations that apply to stocks in the United States. In recent months, there have been numerous frauds in the NFT industry, including counterfeit NFTs and money laundering.