A Bitcoin Ordinal featuring a poop emoji sold for 1.2 BTC — equivalent to roughly $28,000 — on March 1, raising questions about whether the transaction was a legitimate sale or a wash trading attempt.

Wash trading is when the buyer and seller in a transaction are the same or in cahoots, usually to drive an asset’s price up artificially by generating interest and causing FOMO.

The crypto and NFT industry is largely unregulated and anonymous, making it difficult to tell whether a trade is legitimate or not. Historically, NFT wash traders have exploited the digital nature of these markets to fake sales.

In 2022, research revealed that 95% of all trading volume on NFT platform LooksRare was linked to wash trading. Meanwhile, Dune Analytics’ research found that 45% of all NFT trading volume on Ethereum was linked to shady trades.

The Ordinal Protocol, developed by Casey Rodarmor and launched on Jan. 21, allows users to embed extra data in sats, the lowest denomination of Bitcoin. In the case of Inscription #121, the ordinal is a jpeg image of a poop emoji.

The crypto community is divided on whether ordinals are good for the Bitcoin ecosystem or detrimental for its overall image.

“It’s hard to tell whether a trade is legitimate or not,” said crypto analyst John Smith. “Investors should be increasingly cautious when dabbling in NFT trades.”

The NFT market has exploded in recent months, with investors flocking to the sector in search of the next big thing. But with the lack of regulation and the potential for wash trading, investors should be aware of the risks associated with these markets.