tl;dr
CLS Global, a financial services firm, has been fined over $400,000 and sentenced to three years' probation for engaging in wash trading in U.S. cryptocurrency markets. The firm pleaded guilty to market manipulation and wire fraud charges, following an undercover law enforcement operation targeting ...
CLS Global, a financial services firm, has been fined over $400,000 and sentenced to three years' probation for engaging in wash trading in U.S. cryptocurrency markets. The firm pleaded guilty to market manipulation and wire fraud charges, following an undercover law enforcement operation targeting sham trading and investor attraction. The company's actions involved the use of an algorithm for self-trades to mimic organic buying and selling.
The charges stemmed from its involvement with NexFundAI, an apparent cryptocurrency firm and Ethereum-based token created by the FBI as part of a sting operation. CLS Global, with a staff of 50 employed individuals, is based in the United Arab Emirates but works with cryptocurrencies available to investors inside the United States. The company pleaded guilty to one count of conspiracy to commit market manipulation and wire fraud and one count of wire fraud in January 2025.
In a statement, the U.S. Attorney's Office for the District of Massachusetts noted that a remaining defendant in the case is presumed innocent “unless and until proven guilty beyond a reasonable doubt in a court of law.” The company was ordered to pay a total of $428,059 to the government, in the form of seized cryptocurrency and fines. The company was also sentenced to three years’ probation, during which time it will not be able to participate in U.S. cryptocurrency markets.
In a series of videoconferences, an employee of the firm revealed that the firm employed an algorithm that, “basically does self-trades,” making cryptocurrency trades from multiple wallets in an effort to mimic “organic buying and selling.” The employee went on to say, “I know that it’s wash trading and I know people might not be happy about it.”