It's called wash trading and for securities, it is illegal. I dont think the Nyan Cat NFT is a security. Its more like a commodity. And yes, wash trading and money laundering via art is an age-old practice.

My point was that the Nyan Cat NFT likely isn't a security, and hence wash trading might not be illegal.

IANAL so I'm probably misusing the term. But it definitely feels like buying and selling the asset secretly to inflate it's market value is some sort of fraud