US charges 3 companies, 15 people with cryptocurrency fraud
Adds details on disabling of FBI directed token in paragraph 6
By Nate Raymond
BOSTON, Oct 9 (Reuters) -Three cryptocurrency companies and 15 people have been charged with engaging in widespread fraud and market manipulation following an investigation in which the FBI for the first time directed the creation of a new digital token to help authorities ferret out crime.
Federal prosecutors in Boston charged the firms Gotbit, ZM Quant, CLS Global and the leaders and employees of those and other companies in a takedown that has led tofour arrests, agreements by five people to plead guilty and the seizure of over $25 million worth of cryptocurrency.
Acting U.S. Attorney Joshua Levy said the defendants engaged in sham trades to artificially inflate the trading volume of various cryptocurrency tokens before selling them off, "leaving innocent investors holding the bag."
"This is a case where new age technology, crypto, meets an old school fraud, in this case a 'pump and dump' scheme, which is as old as the stock markets," Levy told reporters.
As part of the investigation, the FBI directed the creation of a cryptocurrency company, NexFundAI, which had a token on the Ethereum blockchain that prosecutors said ZM Quant, CLS Global and another company, MyTrade, agreed to help manipulate.
Authorities said that token was traded but that they carefully monitored to minimize the risk retail investors might buy it before disabling trading. The U.S. Securities and Exchange Commission filed related civil cases as well.
Prosecutors said that Saitama, the largest of the companies involved, at one point had a market value of $7.5 billion, after its leadership began manipulating trading of its tokens and secretly sold them.
Its chief executive, Manpreet Kohli, was arrested on Monday in the United Kingdom. Five other current or former employees were also charged, and three have pleaded guilty.
Others charged were Aleksei Andriunin, CEO of Gotbit, a cryptocurrency "market maker" who lived in Russia and Portugal. He was arrested in Portugal on Tuesday. Two of his company's employees in Russia were also charged.
Prosecutors said that from 2018 to 2024, Gotbit engaged in "wash trading," a form of sham trading, and market manipulation on behalf of several cryptocurrency clients to help artificially inflate trading volume for their tokens.
Also charged were fourother individuals who worked at cryptocurrency "market makers" that prosecutors said advertised market manipulation services to clients.
They are Liu Zhou, the founder of market maker MyTrade, who according to court papers has agreed to plead guilty; Riqui Liu of the United Kingdom and Hong Kong and Baijun Ou of Hong Kong, who both worked at ZM Quant; and Andrey Zhorzhes of the United Arab Emirates, an employee of CLS Global.
They could not be immediately reached for comment.
Others charged were Michael Thompson of Virginia, who worked at a cryptocurrency company called VZZN founded by a former Saitama employee, and Bradley Beatty of Florida, who prosecutors said fraudulently promoted his crypto company, Lillian Finance.
Reporting by Nate Raymond in Boston; Editing by Leslie Adler, David Gregorio and Richard Chang
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
