Neiro ends its relationship with Gotbit, citing recent fraud charges and market manipulation accusations.
U.S. authorities charge Gotbit with manipulating token prices through "pump and dump" schemes, impacting multiple investors.
Neiro reassures its community, promising new market makers aligned with their long-term goals and interests.
Neiro has announced it has severed its relationship with Gotbit, a former market-making partner, following recent legal issues involving Gotbit and U.S. authorities. Neiro clarified that no issues with Gotbit are related to their project.Â
https://twitter.com/neiro/status/1844679682848936156
However, they decided to distance themselves from Gotbit for the sake of their project and community. Funds have already been withdrawn from Gotbit, with more funds expected. In the interim, Neiroâs CTO has committed to using personal funds to continue market-making activities until a new partnership is secured.
Neiro Takes Action After Market Manipulation Allegations
U.S. authorities, including the SEC, FBI, and DOJ, recently charged Gotbit Consulting, ZM Quant Investment, and CLS Global with fraud and market manipulation. The charges stem from alleged misconduct that spans several years.Â
Gotbit, in particular, has been accused of manipulating token prices through "pump and dump" schemes. The firm allegedly sold more tokens than it purchased, leading to price manipulation and significant losses for investors.
These accusations have prompted Neiro to withdraw from its partnership with Gotbit. The firm has reassured its community that new market makers will be introduced soon. Neiro stated that the new market makers are industry leaders who align with their long-term vision and community interests.
Questions Raised About Neiro's Initial Choice of Gotbit
Blockchain investigator Zachxbt questioned Neiroâs decision to partner with Gotbit, a firm with a well-documented history of questionable practices. He highlighted Gotbitâs involvement in manipulating token prices and their use of tactics designed to create FOMO, raising concerns about how Neiro selected Gotbit as a market-making partner in the first place.
In September 2023, Zachxbt warned against projects working with Gotbit due to its questionable services. He pointed out that Gotbit's tactics were aimed at artificially inflating prices to generate massive profits before selling off holdings at the expense of new investors.
Authorities Take Action Against Gotbit and Other Firms
The legal actions taken against Gotbit and other firms like ZM Quant and CLS Global have led to multiple arrests and plea deals. Authorities have charged 18 individuals, some of whom face up to 20 years in prison if convicted. The crackdown on these firms highlights the growing concern over market manipulation in the cryptocurrency industry.
Prosecutors accuse Gotbit of generating billions in artificial trading volume daily through wash trading, further escalating the charges against the company.
