- Gotbit and others face charges of manipulating crypto markets using wash trading.
- U.S. agencies target 18 individuals across multiple countries for fraud.
The U.S. Securities and Exchange Commission (SEC), Federal Bureau of Investigation (FBI), and Department of Justice (DOJ) have filed lawsuits against Gotbit Consulting, ZM Quant Investment, CLS Global, and several individuals for market manipulation and fraud.
The charges primarily involve practices like wash trading, where fake transactions were used to inflate trading volumes artificially, misleading investors and boosting token prices. These companies allegedly orchestrated pump-and-dump schemes to profit by selling overpriced tokens to unsuspecting investors.
Global Defendants Face Charges in U.S. Crypto Fraud
Gotbit Consulting and its marketing director, Fedor Kedrov, are accused of manipulating the markets for cryptocurrencies Saitama and Robo Inu. The SEC claims that Gotbit used wash trading to create false trading volume, misleading investors into believing there was significant interest in these coins.
Aleksei Andriunin, the CEO of Gotbit, a crypto “market maker” based in Russia and Portugal, was charged and arrested in Portugal on Tuesday. Two of his employees in Russia were also implicated in the case.
The US SEC, FBI, and DOJ sued #Gotbit and other crypto firms for alleged fraud and market manipulation.#Gotbit previously claimed that they sold $WATER to lower the price to a fair level.
— Lookonchain (@lookonchain) October 10, 2024
However, #Gotbit sold significantly more tokens than purchased!https://t.co/qtYsQvX6OB pic.twitter.com/8OWV5qOnMi
Prosecutors revealed that from 2018 to 2024, Gotbit facilitated wash trading and manipulated markets for various cryptocurrency clients. This strategy inflated token trading volumes and created misleading price movements.
“This is a case where a cutting-edge technology – cryptocurrency – was used in conjunction with an age-old scheme – the pump and dump,” stated Acting U.S. Attorney Joshua Levy.
Similarly, ZM Quant and CLS Global face charges of manipulating the crypto token NexFundAI, which the FBI set up to catch fraudulent activity.
The lawsuits also accuse Vy Pham, a California resident originally from Vietnam, of conducting unregistered securities offerings. In addition, he allegedly manipulated the market through these activities. Furthermore, authorities have charged four of Pham’s associates in connection with the case.
As a result, the coordinated effort seeks to safeguard the integrity of the cryptocurrency market. Moreover, regulators are pursuing injunctions and financial penalties against all involved to ensure accountability. These lawsuits represent one of the largest U.S. efforts to combat crypto market manipulation. They span multiple jurisdictions, with defendants located in Russia, Hong Kong, India, and the United Kingdom.
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