On October 12, 2024, the FBI, in coordination with other US law enforcement agencies, uncovered a large-scale cryptocurrency market manipulation network. The investigation focused on companies and individuals allegedly involved in “wash trading” — a form of falsified trading intended to inflate trading volume and token value. The companies accused included Gotbit, ZM Quant, CLS Global, MyTrade, and related individuals.
Case Details
The FBI created a fake token to trap the scammers. They found that the companies were trading inside accounts to create the illusion of high trading volume, thereby attracting investors. After the price rose to the desired level, the subjects sold the tokens, a form of fraud known as “pump-and-dump.”
Investigation Results
- A total of 18 individuals and organizations have been prosecuted, with several subjects arrested in the US, UK and Portugal.
- Approximately $25 million in cryptocurrencies was seized, and several trading bots involved in these activities were disabled.
- Law enforcement agencies stressed that they will continue to monitor and prevent fraudulent activities in the crypto market to protect investors.
The FBI investigation is an important step forward in protecting the integrity of the digital asset market and preventing price manipulation. Investors need to be cautious and understand the risks associated with crypto projects to avoid being scammed.
