- The FBI creates their own cryptocurrency, NexFundAI to catch market manipulators.
- The authorities have seized over $25 million worth of cryptocurrency.
The United States Federal Bureau of Investigation (FBI) created its own cryptocurrency, “NexFundAI,” operated on the Ethereum blockchain. The FBI initiated the token to capture the attention of market manipulators and illicit activities in the cryptocurrency market.
Besides, the federal prosecutors in Boston announced charges against eighteen individuals and entities involved in widespread fraud and manipulation in the cryptocurrency market as part of the FBI’s sting operation called “Operation Token Mirrors.”
The FBI’s operation occurs against the increased cryptocurrency fraud. FBI’s 2023 Cryptocurrency Fraud Report shows that Americans were defrauded for $5.6 billion through crypto-related schemes. This figure represents a 45% surge from the prior year.
In addition, the four cryptocurrency firms included are Gotbit, ZM Quant, CLS Global, and MyTrade. As per the document, the companies, with their leaders and employees, have allegedly created cryptocurrency companies, released misleading statements, and executed fake trades (wash trades) to inflate the value of their tokens. This misleads investors, which ends up driving the token price high.
The defendants sold their tokens at artificially high prices in a “pump and dump” scheme. Moreover, Saitama, one of the largest firms, once had a market value in the billions.
Furthermore, the FBI have seized more than $25 million worth of cryptocurrency and multiple trading bots responsible for millions of dollars worth of wash trades for nearly sixty tokens, which have been deactivated, as part of the investigation.
On the other hand, the Securities and Exchange Commission (SEC) has filed civil complaints for violating the securities laws against Gotbit, CLS, ZM Quant, Saitama, and Robo Inu.
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