In a first in U.S. history, federal prosecutors in Boston have filed criminal charges against several financial firms for cryptocurrency market manipulation and wash trading. The charges were announced on October 9, 2024, and involve companies including Gotbit, ZM Quant, and several other crypto tokens such as Saitama, Robo Inu, and VZZN.
According to prosecutors, these firms used wash trading tactics to create the illusion of large trading volumes, making investors believe that these assets were valuable. After driving up prices, they sold them at artificial prices to make a profit, a typical practice in âpump and dumpâ schemes. More than $25 million in cryptocurrency was seized and related trading bots were disabled.
The FBI also participated in an operation called âOperation Token Mirrors,â in which they created their own cryptocurrency to infiltrate and track these fraudulent activities. The investigation found that many companies and individuals were using new technologies like cryptocurrencies to commit fraud that has been around for centuries.
