FBI Charges 18 in Major Crypto Fraud Bust, Uses NexFundAI Token to Uncover Market Manipulation
- The FBI charged 18 individuals and firms for inflating token prices through illegal wash trading tactics.
- Over $25 million in crypto was seized as the FBI uncovered widespread market manipulation using NexFundAI.
- Four major crypto firms are accused of deceiving investors with false claims and pump-and-dump schemes.
The FBI has charged 18 individuals and businesses with their involvement in a major cryptocurrency fraud operation. As part of the inquiry, the FBI created its own cryptocurrency, NexFundAI, to track down those implicated in market manipulation.
FBI Uncovers Crypto Token Fraud
This led to indictments against Gotbit, ZM Quant, CLS Global, and MyTrade. They are accused of defrauding investors by increasing token prices using illicit techniques.
The accused firms are suspected of inflating the value of more than 60 tokens, including the Saitama Token, which once had a market worth of $7.5 billion. These companies allegedly made false claims concerning the tokens and used different deceptive tactics to defraud investors. After inflating token values, they would sell them at higher prices, leaving investors with losses in a pump and dump scheme.
How the Fraud Worked
The FBI discovered that the companies engaged in a practice known as wash trading. This is when a firm buys and sells the same token to make it appear as if there is great demand. The companies used companies such as ZM Quant and Gotbit to carry out these fake trades.
They used many wallets to conceal their actual activities, making the tokens appear more popular than they were. As a result, investors believed the tokens were valuable and bought in.
So far, authorities have seized more than $25 million in cryptocurrencies. They have also shut down trading bots responsible for millions of dollars in illegal deals. Some of the defendants have already pled guilty, while others have been detained in the United States, the United Kingdom, and Portugal.
Read CRYPTONEWSLAND on google newsLegal Outcome
Assistant US Attorney Joshua Levy emphasized that wash trading, which is illegal in traditional markets, is equally unlawful in the cryptocurrency space.
The defendants face charges of market manipulation and wire fraud, which may result in prison sentences of up to 20 years. The case serves as a reminder for investors to exercise caution while dealing with cryptocurrency.
disclaimer read moreCrypto News Land, also abbreviated as "CNL", is an independent media entity - we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.
coin_news.disclaimer
coin_news.may_like
Berkshire Hathaway's cash reserves exceed $300 billion
AAVE breaks above $140
Berkshire Hathaway A's third-quarter net profit is $26.25 billion