Key Takeaways:
- Four firms—Gotbit, CLS Global, MyTrade, and ZM Quant—are charged with market manipulation and investor fraud through “wash trading.”
- The SEC and DOJ have indicted key players for inflating trading volumes and selling manipulated tokens at inflated prices.
- The DOJ has recovered $25 million in fraudulent proceeds, with further investigations ongoing.
Federal prosecutors have charged four market makers—Gotbit, CLS Global, MyTrade, and ZM Quant—with market manipulation and investor fraud.
These firms allegedly engaged in “wash trading” to artificially inflate trading volumes and token prices, misleading investors and exchanges.
US Prosecutors Charge 14 People, 4 Companies For Crypto Fraud & Market Manipulation https://t.co/VNzrm42hDh
— Watcher.Guru (@WatcherGuru) October 9, 2024
This allowed them to sell manipulated tokens at inflated prices and reduce trading fees.
Key individuals, including Baijun Ou (ZM Quant), Feder Kedrov (Gotbit), and Andrey Zhorzhes (CLS Global), along with crypto promoters, face charges. Gotbit’s co-founder, Alexey Andryunin, openly discussed the firm’s unethical practices.
Manipulated tokens include Robo Inu, VZZN, and Saitama.
The U.S. Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) led the investigation, which uncovered the fraud over two years ago.
The FBI also created a token, NextFundAI, to aid the investigation.
The DOJ has recovered $25 million in fraudulent proceeds, with more recovery efforts ongoing.
About The Author
Efe Bravo, a seasoned journalist, delivers compelling insights into the cryptocurrency and blockchain industry.
His articles offer a deep dive into the latest trends, projects, and technological advancements shaping the future of digital finance.
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