🔥 Caught Red-Handed: FBI Uses Fake Project to Bust Market Makers
posted 10 Oct 2024
FBI agents set up a fake company called NexFundAI, which issued several tokens on the Ethereum blockchain. The aim was to stage a trap to expose market makers involved in market manipulation and catch the fraudsters red-handed.
Posing as developers, FBI agents approached several crypto companies, seeking help to inflate token prices. Representatives from Gotbit, ZM Quant, CLS Global, and MyTrade agreed to participate, artificially boosting NexFundAI token trading volumes.
The accused created the illusion of active trading by buying and selling tokens among themselves and then selling these tokens to investors who were misled about their true value.
The U.S. Attorney’s Office has officially charged 18 individuals with illegal market manipulation and conducting wash trades.
So far, four people have been arrested, with five others pleading guilty and released on bail. Among those arrested is Manpreet Kohli, CEO of Saitama, a company valued at $7.5 billion.
Also under investigation is Aleksei Andriunin, a well-known figure in the crypto space and a promoter of various meme coins. He leads Gotbit, a firm that markets its ability to craft customized strategies aimed at boosting token demand and price.
Aleksei Andriunin. Source: Reddit
Andriunin, a Russian citizen, was residing in Portugal, where he was arrested. He is expected to be extradited to the U.S. in a few days. Two of his colleagues from Russia are also under investigation, but it is unclear how the FBI will reach them.
Read more: Crypto Regulation in Portugal: Key Features
Authorities have seized over $25 million in cryptocurrency, mostly meme coins. Additionally, several trading bots responsible for wash trades involving around 60 different tokens have been deactivated.
This operation highlights the significant level of fraud within the crypto market and sets a historic precedent.
The FBI’s decisive actions could reduce the hype around meme coins and help clean up the sector from assets inflated through Pump&Dump and other manipulative schemes.
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