Huh. What if 2 people decide to do it?
Two accounts trading back and forth will light up anti-spoofing tech from the 1980s. Keep in mind that the AML regulations Coinbase follows are specifically designed to catch fake money movement.
It's the same stuff that catches money laundering. Coinbase isn't exempt from anti-money laundering laws. (With respect to Coinbase not being subject to the Exchange Act, that's very much an open, if irrelevant to this discussion, question.)
I'm not sure Coinbase's need to report money laundering applies.
A lot of money laundering involves wash trading. That's why institutions like Coinbase have systems in place to detect it. Non-laundering wash trades would get flagged by such a system. If it were systemic, it would almost certainly merit a SAR.
Citation needed, because wash trading and money laundering are not mutually inclusive. There are not controls in place for money laundering that detect wash trading, because crypto is not a regulated security.
/s