Gotbit CEO Alexey Andryunin has been arrested in Portugal at the request of the FBI and is currently awaiting extradition to the United States to face charges. Gotbit Hedge Fund, a market maker for the Hamster Kombat token ($HMSTR), is under investigation. Following the arrest, the price of $HMSTR fell 12% in the past 24 hours, causing investors to worry.

The U.S. Department of Justice has charged 16 companies and several individuals for participating in a cryptocurrency fraud scheme, including Gotbit, ZM Quant, and CLS Global. So far, the investigation has resulted in four arrests, six plea deals, and the seizure of more than $30 million in cryptocurrency.

The FBI, using its own Ethereum-based token called NexFundAI, has been investigating fraudulent market practices. They approached the market makers under a fake project and discovered how these companies manipulated trading volume and the market by using multiple wallets and artificial transactions, a tactic known as “wash trading.” These actions have led to serious charges against those involved. If convicted, they could face up to 25 years in prison for market manipulation. The case is a reminder of the risks in the cryptocurrency space and the consequences of engaging in illegal activities.