Coinspeaker US SEC Joins Hands with DOJ, FBI in Crackdown on Fraudulent Crypto Firms
The US Securities and Exchange Commission (SEC) has once again taken decisive measures filing civil lawsuits in the District Court of Massachusetts, on fraudulent crypto firms charging them with unfair activities and manipulation. In this investigation, the US SEC has also joined hands with the Justice Department (DOJ) as well as the Federal Bureau of Investigation (FBI).
The lawsuit filed on Wednesday, October 9, names three crypto firms: ZM Quant Investment, Gotbit Consulting, and CLS Global. Additionally, the SEC has also filed lawsuits on two individuals involved with the case while charging a total of eighteen individuals and entities, reported the Justice Department.
The US SEC has accused Gotbit Consulting and its marketing director Fedor Kedrov of market manipulation via wash trading on behalf of individuals promoting digital assets like Robo Inu and Saitama.
The crypto projects were organized by Vy Pham, a Vietnamese citizen residing in California. She faces separate charges for unregistered securities offerings, securities fraud, and market manipulation. Besides, the regulator has separately sued four people associated with Pham.
Additionally, the SEC has also charged two other firms ZM Quant Investment and CLS Global in relation to a crypto dubbed NexFundAI, created by the FBI. Furthermore, ZM Quant, along with four other individuals also faces charges involving another crypto asset, SaitaRealty coin.
ZM Quant executives are currently in Russia, England, and Hong Kong. “The complaints seek permanent injunctions, conduct-based injunctions, disgorgement of allegedly ill-gotten gains plus interest, and civil penalties against all the defendants, as well as officer and director bars against certain defendants,” noted the SEC.
In a separate statement, the FBI listed additional cryptocurrencies under investigation, including Robo Inu, SaitaChain, Saitama, VZZN, NexFundAI, Lillian Finance, and SaitaRealty.
US DOJ Charges Eighteen Individuals
The US Department of Justice has charged a total of eighteen individuals and entities for wire fraud and manipulation of the crypto market. Moreover, the regulator seized $25 million in cryptocurrency from several trading bots involved with wash trading activities. Acting United States Attorney Joshua Levy said:
“This investigation, the first of its kind, identified numerous fraudsters in the cryptocurrency industry. Wash trading has long been outlawed in the financial markets, and cryptocurrency is no exception. These are cases where an innovative technology – cryptocurrency – met a century old scheme – the pump and dump. The message today is, if you make false statements to trick investors, that’s fraud. Period. Our Office will aggressively pursue fraud, including in the cryptocurrency industry”.
The recent crackdown might push the SEC to double down its efforts to investigate wrong practices in the crypto space.
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US SEC Joins Hands with DOJ, FBI in Crackdown on Fraudulent Crypto Firms