Boost the volume of trades appearing on the exchange, and the apparent market value of the asset.
You’re right. I think wash refers to selling then buying at the same price resulting in a wash.
You’re confusing wash trading (trading with yourself) with wash sales (a restricted form of capital loss harvesting), which are more or less unrelated despite having “wash” in the name.
> We introduce systematic tests exploiting robust statistical and behavioral patterns in trading to detect fake transactions on 29 cryptocurrency exchanges. Regulated exchanges feature patterns consistently observed in financial markets and nature; abnormal first-significant-digit distributions, size rounding, and transaction tail distributions on unregulated exchanges reveal rampant manipulations unlikely driven by strategy or exchange heterogeneity. We quantify the wash trading on each unregulated exchange, which averaged over 70% of the reported volume. We further document how these fabricated volumes (trillions of dollars annually) improve exchange ranking, temporarily distort prices, and relate to exchange characteristics (e.g., age and userbase), market conditions, and regulation.
"wash trading" appears to be fraudulent trades injected into the exchange in order to boost the volume of trades appearing on the exchange.