The US law enforcement agency, the Federal Bureau of Investigation (FBI), has resorted to an interesting method to catch 18 individuals and companies involved in market manipulation in cryptocurrencies. The police department, which issued an artificial intelligence-themed token, caught the fraudsters red-handed by pretending to be the project team of this token.
The FBI, which created a token called NexFundAI (NexF) on the Ethereum blockchain, then contacted ZM Quant, CLS Global and MyTrade to receive market making services. As a result of the communication and investigations carried out, it was determined that these companies were involved in fraud and manipulation in the cryptocurrency market, inflating the prices of the tokens with fake volumes and then dropping them to the bottom.
Among the companies that were filed criminal complaints were Gotbit, ZM Quant, CLS Global and MyTrade, as well as the managers and employees of these companies.
According to the official statement, over $25 million worth of cryptocurrency was seized from the suspects, while trading bots that created millions of dollars worth of fake volume in 60 different cryptocurrencies were also neutralized. On the other hand, it was determined that the suspects made their biggest profit in the token called Saitama. It was emphasized that this token reached a market value of billions of dollars at one time. It was alleged that the names behind the project actively manipulated the market and secretly sold Saitama tokens with a profit of tens of millions of dollars.
The US Department of Justice also filed a criminal complaint against Gotbit, Gotbit’s CEO and two executives, who carry out similar activities in the cryptocurrency market. Aleksei Andriunin, the 26-year-old CEO of Gotbit, who stands out as a market maker especially in meme coins, admitted to creating fake trading volume on cryptocurrency exchanges in 2019. The Russian-born suspect, who was detained in Portugal, is awaiting extradition to the US. The US Securities and Exchange Commission (SEC) also filed a separate lawsuit, claiming that Gotbit created fake trading volume of millions of dollars per day.