The United States has indicted 14 people and four companies on charges of fraud and market manipulation, among other illegal activities. Prosecutors said this is the first criminal case involving a cryptocurrency company over market manipulation and wash trading.
U.S. prosecutors have indicted 14 people and four crypto companies on widespread market manipulation and fraud charges.
Federal prosecutors announced Wednesday that the case involves the first criminal charges against a financial services company related to the cryptocurrency market, according to a press release from the U.S. Attorney's Office for the District of Massachusetts. The accusations include not only fraud, but also sham trading and inflating the price of cryptocurrencies.
“What the FBI uncovered in this case is essentially a new twist on an old-fashioned financial crime. , promoters, and market makers,” said Jody Cohen, special agent in charge of the Federal Bureau of Investigation's Boston Division.
The sophisticated trading scheme cost investors millions of dollars, Cohen added.
The four companies are Gotbit, CLS Global, ZM Quant, and MyTrade.
U.S. prosecutors in Boston also announced charges against company leaders and employees. Those indicted also include individuals from the United States and Hong Kong. Arrests have also been made overseas, with federal prosecutors announcing that five people have agreed to plead guilty to the charges.
Saitama and Gotbit
Maxwell Hernandez, Russell Armand, and Nam Tran are said to have launched and promoted various cryptocurrency projects that targeted price manipulation and fraudulent users.
This includes platform Saima, a crypto project on Ethereum whose native token market cap reached over $7.5 billion at its peak. Saitama also offered real estate investment products and tokens.
One of the crypto companies has indicted Gotbit for allegedly engaging in wash trading and inflating the trading volume of a token called “Robo Inu” tenfold. This resulted in $1 million in fake trading volume.
Imagine being charged $1 million for fake volume of something called Robo Inu 😠pic.twitter.com/Dc0DJbJOuO
— db (@tier10k) October 9, 2024
The charges against 14 people and companies come as the industry continues to face regulatory scrutiny amid allegations of market manipulation and theft.
In September, the FBI arrested Malone Lamb, 20, and Jandiel Serrano, 21, on charges of fraud and money laundering conspiracy in connection with a $230 million cryptocurrency theft.
