FBI Entices Crypto Companies with Manipulative Tokens for Alleged “Price Manipulation” Offenses
Original Source: Coin68
The US has charged four cryptocurrency organizations with market manipulation and a scheme involving a token allegedly created by the FBI. It is the first time US authorities have acted against financial crimes within the crypto industry.
On October 9th, the US Department of Justice indicted companies Gotbit, ZM Quant, CLS Global, and MyTrade, together with 18 of their executives, accusing them of manipulation and speculation on a created crypto token.
The companies implicated in the case constructed a facade of high market demand and active trading for their respective projects. Upon reaching a certain price threshold, defendants began to ship and perform transactions known as arbitrage, undermining the market.
Confessing to their offences, all four companies had cryptographic assets worth $25m Mg seized. Gotbit, ZM Quant, CLS Global and MyTrade are also described as “market makers” recruited to conduct wash trades involving the fraudulent tokens.
For a comprehensive investigation, the FBI contrived a token called “NexFundAI” as a “bait,” employing market makers to launch the market and subsequently gather incriminating evidence. The US authorities’ war on cryptocurrency fraud is timed to coincide with a loss amounting to $5.6 billion amongst American citizens in 2023.
The case has sparked disputes within the crypto community. Multiple tokens have mimicked the NexFundAI bait, becoming actively traded as suspicion rises over a government setup.