- U.S. regulators charge Gotbit, ZM Quant, and CLS Global for alleged crypto fraud and manipulation, leading to multiple arrests.
- Operation Token Mirrors reveals the FBI’s role in exposing crypto wash trading, resulting in over $25M in asset seizures.
- High-profile arrests, including Gotbit CEO, highlight widespread crypto fraud and pump-and-dump schemes targeting investors.
U.S. authorities have launched lawsuits against several cryptocurrency firms, including Gotbit Consulting, ZM Quant Investment, and CLS Global. The lawsuits, filed by the SEC, FBI, and DOJ, accuse these companies of fraud and market manipulation.
The investigations stem from years of alleged misconduct involving cryptocurrencies like Saitama, Robo Inu, and NexFundAI. Prosecutors have also charged 18 individuals, leading to multiple arrests and settlements.
Alleged Wash Trading and Market Manipulation
The companies involved are accused of artificially inflating token prices through wash trading. Gotbit Consulting, in particular, allegedly sold more tokens than it purchased while claiming to lower prices to a fair level.
Authorities state that this led to a “pump and dump” scheme where token prices were manipulated to attract new investors before executives sold off their holdings. Prosecutors revealed that wash trading generated billions of dollars in artificial trading volume each day.
Operation Token Mirrors Unveils FBI’s Role
The FBI created a token called NexFundAI as part of its investigation, dubbed “Operation Token Mirrors.” This sting operation uncovered widespread fraud, revealing how crypto market makers like ZM Quant manipulated trading volumes.
The FBI seized over $25 million in assets as a result. Notably, high-profile individuals, including Gotbit CEO Aleksei Andriunin, were arrested in connection with these allegations.
Criminal Charges and Arrests
Criminal charges have been brought against individuals across several countries, including the U.S., the U.K., Portugal, and Russia. Among those charged are executives from Gotbit, ZM Quant, and CLS Global. Five plea agreements have already been reached, while others face up to 20 years in prison if convicted.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
