FBI Leads Investigation into Cryptocurrency Fraud and Market Manipulation

Charges Brought Against Three Cryptocurrency Companies and 15 Individuals

Wide-Scale Fraud Uncovered

A recent investigation overseen by the FBI has resulted in charges against three cryptocurrency companies and 15 individuals for engaging in fraudulent activities and market manipulation. This marks the first time the FBI has taken such action and has even created a new digital token to aid in the detection of criminal behavior.

Prosecution in Boston Targets Gotbit, ZM Quant, CLS Global, and Others

Significant Seizure of Cryptocurrency

Federal prosecutors in Boston have filed charges against companies including Gotbit, ZM Quant, and CLS Global, along with their executives and employees, for their involvement in deceptive trading practices. The crackdown has already led to four arrests, five individuals agreeing to plead guilty, and the confiscation of over US$25 million worth of cryptocurrency.

New-Age Technology Meets Old-School Fraud

Pump and Dump Scheme Exposed

Acting US Attorney Joshua Levy has revealed that the accused parties conducted sham trades to artificially inflate the trading volume of various cryptocurrency tokens before offloading them, resulting in losses for innocent investors. This case demonstrates the intersection of modern cryptocurrency technology with traditional fraudulent schemes.

FBI Creates Fake Cryptocurrency as Part of Investigation

Rigorous Monitoring by Authorities

As part of the inquiry, the FBI established a cryptocurrency company called NexFundAI, which issued a token on the Ethereum blockchain. This token was manipulated by ZM Quant, CLS Global, and another entity, MyTrade, under surveillance by authorities to prevent retail investors from falling victim. The US Securities and Exchange Commission has also taken civil action related to the case.