The U.S. Department of Justice (DoJ) has announced the arrest and charging of several people and companies for allegedly manipulating digital asset markets in a major fraud scheme.
As part of this investigation, known as Operation Token Mirrors, the FBI took the unusual step of creating its own cryptocurrency, NexFundAI, and a company to go with it.
NexFundAI was promoted as combining finance and artificial intelligence, with the goal of creating a token that would be both a secure investment and a positive force in AI development.
According to the DoJ, three companies—ZM Quant, CLS Global, and MyTrade—and their employees were involved in wash trading (the act of buying and selling the same asset to create fake trading activity) for NexFundAI. Another company, Gotbit, along with its CEO and two directors, was also accused of a similar scheme.
The investigation has involved 18 people and companies so far, with five pleading guilty or agreeing to plead guilty. Three other people have been arrested in Texas, the U.K., and Portugal. Over $25 million in cryptocurrency has been seized, and several trading bots used for wash trading across 60 different cryptocurrencies have been disabled.
Court documents state that the companies involved made fake trades with their own tokens to make them appear like strong investments.
This artificial price increase attracted new investors, who were then deceived as the original traders sold their tokens at inflated prices, a scam known as pump-and-dump.
Those charged include:
- Aleksei Andriunin, Fedor Kedrov, Qawi Jalili, Gotbit Consulting LLC
- Riqui Liu, Baijun Ou, ZM Quant Investment LTD
- Andrey Zhorzhes, CLS Global FZC, LLC
- Liu Zhou, MyTrade MM
- Manpreet Kohli, Haroon Mohsini, Nam Tran, Max Hernandez, Russell Armand, Vy Pham, Saitama LLC
- Robo Inu Finance
- Michael Thompson, VZZN
- Bradley Beatty, Lillian Finance LLC
Sanjay Wadhwa, deputy director of the SEC's Division of Enforcement, commented that these actions show how retail investors are being exploited by fraud in the crypto market. He urged investors to be cautious, noting that these fraudulent schemes often promise unrealistic profits.
Comments
Post a Comment