U.S. prosecutors indicted four cryptocurrency companies and 14 people on Wednesday.
Federal prosecutors in Boston indicted Gotbit, ZM Quant, CLS Global and MyTrade and their executives and employees, and the case resulted in several arrests internationally. Reuters It has been reported.
The U.S. Department of Justice has been cracking down on cryptocurrency companies over the past year, particularly cryptocurrency exchange Binance. Wednesday’s action marks what prosecutors said was “the first criminal prosecution of a financial services company” linked to market manipulation and fake trading in the cryptocurrency industry, according to Reuters.
Four defendants agreed to plead guilty, and more than $25 million in cryptocurrency was seized. name This was announced by the Massachusetts District Attorney’s Office.
Prosecutors said the defendants formed a cryptocurrency company, lied about the cryptocurrency and then conducted wash sales to drive up the price of the tokens to make investors think the tokens were a good investment. The defendants sold tokens at artificially high prices, prosecutors added.
Cryptocurrency companies also hired market makers “to wash trade tokens in return for payments,” prosecutors said. The market makers in question are ZM Quant, Gotbit, CLS Global and MyTrade, according to the statement.
“This is an example of a revolutionary technology, cryptocurrency, meeting a 100-year-old scheme, the pump and dump. The message today is that any misrepresentation made to deceive investors is fraud, period. Our office will actively pursue fraud, including: the cryptocurrency industry,” Acting U.S. Attorney Joshua Levy said in a statement.
The FBI, which also participated in the investigation, created its own cryptocurrency called NexFundAI to detect illegal activities.
“The FBI has taken the unprecedented step of creating its own cryptocurrency token and company to identify, disrupt and bring alleged fraudsters to justice,” said Jody Cohen, Special Agent in Charge of the Federal Bureau of Investigation in Boston. name.
brought by the U.S. Securities and Exchange Commission civil litigation On Wednesday, we took on ZM Quant, Gotbit, and CLS Global against 9 others.
The SEC said Russell Armand, Maxwell Hernandez, Manpreet Singh Kohli, Nam Tran and Vy Pham were promoters and hired “market makers” ZM Quant and Gotbit to initiate artificial trading volumes or manipulate the prices of cryptocurrencies they offered to retail investors. .
The agency also named ZM Quant employees Baijun Ou and Ruiqi Lau, Gotbit’s Fedor Kedrov and CLS Global’s Andrey Zhorzhes, saying they manipulated the market for promoters through wash trading on “popular cryptocurrency asset trading platforms.” .
“Today’s enforcement actions demonstrate once again that retail investors are being harmed by fraudulent practices by institutional actors in the cryptocurrency markets,” Sanjay Wadhwa, deputy director of the SEC’s Division of Enforcement, said in a statement. “With self-proclaimed promoters and self-proclaimed market makers working together to target the investing public with false promises of profits in the cryptocurrency market, investors should keep in mind that the odds could be against them.”
The SEC’s complaint seeks a permanent injunction, clawback and ban from serving as an officer or director.
Update: October 9, 8:40 PM (UTC) with full details
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