DOJ charges Russian CEO in $250K crypto manipulation case

The U.S. Department of Justice (DOJ) has indicted Aleksei Andriunin, CEO of cryptocurrency financial services firm Gotbit, on charges of wire fraud and conspiracy to commit market manipulation. 

According to the DOJ, Andriunin is accused of orchestrating a large-scale scheme to manipulate cryptocurrency markets, misleading investors worldwide.

"A Russian national residing in Portugal has been indicted for his role in a wide-ranging conspiracy to manipulate cryptocurrency markets on behalf of client cryptocurrency companies," the DOJ stated. 

The charges focus on Gotbit’s use of wash trading—a tactic involving fake trades to inflate the appearance of trading activity—to boost the visibility of client cryptocurrencies on platforms like Coinmarketcap and facilitate their listings on major exchanges.

Court documents reveal that Andriunin and Gotbit allegedly generated substantial artificial trading volume, termed "Created Volume," which was marketed to prospective clients as a means to enhance their presence and trading performance. 

The DOJ claims that Andriunin’s records tracked these artificial trades alongside genuine market volumes, allowing Gotbit to offer a deceptive image of market demand to cryptocurrency projects in both the U.S. and abroad.

Gotbit directors Fedor Kedrov and Qawi Jalili are also implicated in the alleged scheme. 

"Gotbit provided market manipulation services to create artificial trading volume for multiple cryptocurrency companies, including companies located in the United States," the DOJ noted.

If found guilty, Andriunin faces up to 20 years in prison, along with a potential fine of $250,000 or twice the gross gain or loss from the offense, as well as restitution and forfeiture. 

"The charge of conspiracy to commit market manipulation and wire fraud provides for a sentence of up to five years in prison, up to three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss from the offense, restitution and forfeiture," the DOJ clarified.