The FBI created its own cryptocurrency to monitor how fraud suspects use it. The idea worked and led to arrests in several countries, Reuters reports.
Details
The token in question is called NexFundAI, an Ethereum-based token that has been indicted against 18 people for widespread fraud and manipulation of cryptocurrency markets, according to the U.S. Department of Justice.
In addition, the US Securities and Exchange Commission has indicted three market makers and nine others for manipulating crypto assets.
Some of the scams involved transactions designed solely to increase trading volume in securities or other assets, the FBI said, creating artificial market activity that misled investors.
An unprecedented step
The US Securities and Exchange Commission explains that such scams are intended to encourage victims to buy crypto assets.
“The FBI took the unprecedented step of creating its own cryptocurrency token and company to identify, expose, and prosecute these alleged scammers,” said Jodi Cohen, Special Agent in Charge of the FBI’s Boston Division. “What the FBI found in this case is essentially a new twist on an old-school financial crime.”
Arrests of individuals potentially involved in the scams were made in the UK, Portugal and the US.
