The US Securities and Exchange Commission (SEC) has uncovered a massive scheme to manipulate the cryptocurrency market, charging Gotbit and four other companies with involvement in fraudulent trading.
Several US government agencies, including the FBI and the Department of Justice, also participated in this investigation, which led to the uncovering of widespread illegal activities in the cryptocurrency market.
Market manipulation using trading robots:
According to a statement from the SEC on October 9, companies such as Gotbit, ZM Quant, CLS Global, and MyTrade MM used bots to artificially increase trading volume on centralized trading platforms.
This type of trading aims to mislead investors by exaggerating fictitious trading activity.
The US Attorney's Office in Massachusetts also noted that some well-known projects such as "Saitama" and "Robo Inu" were among those involved in these schemes.
The companies have been accused of implementing pump-and-dump strategies, whereby a false value is promoted for digital tokens in order to attract investors to buy these digital tokens and then sell them at inflated prices, resulting in significant losses for investors.
$25 Million in Cryptocurrency Seized:
Authorities have seized nearly $25 million in cryptocurrency, as well as disrupted bots responsible for millions of fake transactions across 60 different currencies.
Investigations revealed that these activities caused significant losses to individual investors who were misled into purchasing digital tokens at high prices.
Prominent names in this investigation include Russell Armand, Maxwell Hernandez and Manpreet Kohli, who have been accused of involvement in market manipulation.
Additionally, some Saitama project employees, such as Nam Tran and Vi Pham, were accused of using Gotbit tools to generate fake trading volumes.
Some of the defendants have already pleaded guilty in these cases, including Armand and Hernandez, while others, like Kohli and Tran, face additional charges of conspiracy to commit wire fraud and unlicensed money transfer.
As part of the investigation, the FBI created a fake cryptocurrency called “NexFundAI,” with the aim of infiltrating the internal operations of the involved marketplace companies.
NexFundAI was designed to appear as a legitimate project that combined cryptocurrencies and artificial intelligence, which helped attract market manipulators who tried to exploit it.
