FBI scores big win against organized crypto crime
The U.S. authorities crack down on multiple crypto companies and individuals.
The U.S. authorities are cracking down on multiple crypto companies and individuals. In a joint operation by the FBI, the Department of Justice (DOJ), and the U.S. Securities and Exchange Commission (SEC), three crypto companies and 15 people were charged with market manipulation and fraud, among other charges.
In this operation, the FBI for the first time deployed its own crypto token, the "NextFundAI" token. Public prosecutors in Boston filed charges against the companies Gotbit, ZM Quant, CLS Global, their executives and staff, and also against people from affiliated companies. This led to four arrests. Additionally, five people pled guilty. More than $25 million in cryptocurrency was seized.
According to the involved prosecutor Joshua Levy, the defendants engaged in sham transactions and market manipulation to artificially push up the value of various tokens. They then sold those tokens quickly, in what’s known as a "pump-and-dump" scheme.
On their website, Gotbit openly advertises offering tailor-made growth strategies for tokens with the goal of "creating buying pressure in the market." This drew the authorities’ attention and spurred an investigation into market manipulation.
During the investigation, the FBI set up a crypto company named NextFundAI and issued its own token on the Ethereum network. The charged companies allegedly participated in manipulating this token, pulling them into the researchers’ trap.
The largest company reportedly involved is Saitama, with a market cap of $7.5 billion. CEO Manpreet Kohli was arrested Monday in the United Kingdom. Additionally, five current or former employees were charged, three of whom pled guilty.
Aleksei Andriunin, the CEO of Gotbit, a token-marketing firm, was also charged. Andriunin, who lived in both Russia and Portugal, was arrested in Portugal on Tuesday. Authorities also accuse Gotbit of wash trading, a form of market manipulation where fake trades are used to boost trading volume.
