More than $25 million in crypto seized, three companies charged

Three crypto companies and 15 individuals have been charged with extensive fraud and market manipulation. This follows an unprecedented investigation by the US Federal Bureau of Investigation (FBI), which involved the creation of a new digital token to help expose criminal activity in the industry.

Federal prosecutors in Boston announced charges against Gotbit, ZM Quant and CLS Global, as well as their leaders and employees. This led to four arrests, five guilty pleas, and the seizure of over $25 million in crypto.

Acting US Attorney Joshua Levy emphasized that the defendants engaged in sham operations to artificially inflate the trading volumes of various tokens, ultimately leaving innocent investors “holding the bag.”

According to the South China Morning Post report, Levy characterized the case as a combination of modern technology and traditional fraud, referring specifically to a “bomb and dump” scheme that has long plagued financial markets.

As part of the investigation, the FBI established a crypto company called NexFundAI, which operated a token on the Ethereum blockchain that ZM Quant, CLS Global and another company, MyTrade, agreed to manipulate. This token was closely monitored to prevent retail investors from buying it before trading was disabled.

The Securities and Exchange Commission (SEC) has also filed related civil cases. Among the companies indicted was Saitama, whose market value soared to $7.5 billion largely due to the manipulation of its tokens by its leadership, including CEO Manpreet Singh Kohli, who was arrested in the United Kingdom.

Meanwhile, Gotbit CEO Aleksei Andriunin was arrested in Portugal, while two of his company’s employees in Russia were also charged as part of the ongoing investigation. Federal prosecutors in Boston noted that from 2018 to 2024, Gotbit engaged in “wash trading” and other manipulative practices on behalf of crypto clients in an attempt to increase token trading volumes.

Several other individuals involved in market-making operations, including Liu Zhou and Riqui Liu, have also been charged.

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