Crypto fraud: US charges 3 market makers, 18 others in sting operation

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US government has clamped down on crypto fraud and manipulation in sting operation that nabbed key crypto market makers.

The U.S. government has charged three market makers and 18 others with crypto fraud and manipulation. The FBI led the investigation by setting a trap and creating a digital token, NextFundAI, to document the alleged perpetrators’ actions.

Following the investigation, four firms were indicted for widespread crypto fraud and manipulation. This included Gotbit, ZM Quant, CLS Global, and MyTrade.“This investigation, the first of its kind…Wash trading has long been outlawed in the financial markets, and cryptocurrency is no exception. The message today is, if you make false statements to trick investors, that’s fraud. Period.”The investigation established that the market makers offered ‘market manipulation-as-a-service.

The prosecutors mentioned the Saitama token, which hit a multi-billion dollar market cap, as an example of the pump-and-dump scheme. As a result, the investigation implicated 18 people, including leaders of the market makers, their employees, and promoters of the fraudulent tokens.Other leaders, including ZM Quant’s Riqui Liu and Baijun Ou, CLS Global’s Andrey Zhorzhes, and Liu Zhou of MyTrade, were indicted, too.That said, retailers harmed by NextFundAI or the tokens mentioned in the investigation, like Robo Inu, would be refunded.

However, the charges appeared to have ‘unsettled’ some social media influencers and crypto promoters. Ansem, one of X’s crypto influencers and promoters,Benjamin is a Telecommunication Engineering graduate who is passionate about crypto-markets and unraveling market trends. Armed with charts and patterns, he's interested in making the intricate, complex landscape of digital assets more palatable for every user.Subscribe to get it daily in your inbox.

 

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