Trade Size Manipulation

Definition ∞ Trade size manipulation involves artificially influencing the perceived liquidity or trading activity of a digital asset by executing a series of trades designed to mislead market participants. This can include wash trading, where an entity buys and sells the same asset to create false volume, or placing large orders without intent to execute. The objective is often to create a false impression of demand or supply. Such actions distort true market conditions.
Context ∞ News in the cryptocurrency space frequently covers allegations or investigations into trade size manipulation, particularly on less regulated exchanges or for smaller cap assets. Regulators globally are increasing their scrutiny of these practices, aiming to protect investors and maintain market integrity. The presence of such manipulation can lead to inaccurate price discovery and unfair trading conditions for legitimate participants.