tl;dr
The U.S. Department of Justice has filed criminal charges against 14 individuals and four crypto companies for market manipulation and "wash trading" in the digital asset industry, seizing over $25 million in crypto. This is the first case of its kind. The companies are accused of inflating token pr...
DOJ Charges 14 Individuals and 4 Crypto Companies for Market Manipulation The U.S. Department of Justice has filed criminal charges against 14 individuals and four crypto companies for market manipulation and "wash trading" in the digital asset industry, seizing over $25 million in crypto. This is the first case of its kind.
The companies are accused of inflating token prices through wash trades to attract new investors and then conducting a "pump and dump" scheme.
The FBI created a fake digital token called NexFundAI as part of the investigation.
The Securities and Exchange Commission also filed civil charges, alleging "on-demand market manipulation" by one of the companies.
Additionally, the DOJ arrested the CEO of one of the companies, who boasted about faking trade volumes at crypto exchanges in the past.
Feds on Wednesday hit 14 individuals and four crypto companies with criminal charges for market manipulation and "wash trading" in the digital asset industry—the first case of its kind. Over $25 million in crypto has been seized in the case, the U.S. Department of Justice (DOJ) said, and cops even created a fake digital token in order to catch alleged criminals in the act of manipulation.
The DOJ announced charges against Gotbit, ZM Quant, CLS Global, and MyTrade. The companies allegedly made wash trades with digital tokens to inflate their prices, attracting new investors in the process. Then, feds alleged on Wednesday, defendants sold their tokens—what is known as a "pump and dump" scheme.
"These are cases where an innovative technology—cryptocurrency—met a century-old scheme—the pump and dump," Acting United States Attorney Joshua Levy said in a statement. "Wash trading has long been outlawed in the financial markets, and cryptocurrency is no exception."
The DOJ said that the FBI created a token called NexFundAI as part of its investigation, dubbed "Operation Token Mirrors." It alleged that ZM Quant, CLS Global, and MyTrade washed the token or conspired to wash it—that is, to manipulate the trading to make the trading numbers more appealing.
The DOJ added that it had hit Gotbit, its CEO, and two of its directors for perpetrating a similar scheme. Gotbit billed itself as a hedge fund and meme coin market maker. It previously argued in PR announcements that meme coins were a way to onboard new companies into the crypto space.
Meme coins are cryptocurrencies based on internet memes and jokes that often skyrocket quickly in value seemingly out of nowhere, only to disappear just as quickly.
One of the defendants in the case, Gotbit CEO Aleksei Andriunin, 26, bragged back in 2019 that he had "made a business of faking trade volumes at crypto exchanges." Feds arrested the Russian-born defendant yesterday in Portugal and he now awaits extradition.
Feds alleged that another one of the companies, Saitama, provided would-be investors with a token and services that swelled to have a market cap of $7.5 billion. Those behind the crypto project, though, were allegedly actively manipulating the market for the Saitama token and "secretly selling their Saitama tokens for tens of millions in profits."
In separate civil charges, the Securities and Exchange Commission alleged that Gotbit provides "on-demand market manipulation" by "generating fake, daily trading volume often in the millions of dollars by essentially trading crypto assets with itself."
The Wall Street regulator said it was seeking permanent injunctions against Gotbit, Andriunin, and his team, along with disgorgement of all ill-gotten gains from the alleged unlawful conduct.
More about General Dynamics Corporation
General Dynamics Corporation Summary General Dynamics Corporation
General Dynamics Corporation (GD) is an American aerospace and defense corporation. It is headquartered in Reston, Fairfax County, Virginia.
Industry and Sector
Industry: Manufacturing, Ship & Boat Building & Repairing
Key Financial Metrics
Market Cap: $81.58 billion
PE Ratio: 23.18
EPS: $5.48
Dividend Yield: 12.81
52-Week High: $164.48
52-Week Low: $78.90
Revenue: $44.946 billion
Net Income: $3.24 billion
Debt to Equity: 0.207
Current Ratio: 0.18