Wash trading has been deemed illegal in most jurisdictions.
For instance, the United States enacted the Commodity Exchange Act (CEA) in 1936[1] to prohibit wash trading.
To comply with regulations, most regulated stock exchanges have implemented protective measures, such as Self-Trade Prevention Functionality (STPF) on the Intercontinental Exchange (ICE).
[2] However, in some unregulated emerging markets, such as cryptocurrency,[3][4][5] the practice is common.
Various practitioners engage in wash trading for several reasons.