FBI Cracks Down on Gotbit and Others in Crypto Manipulation Sting

In Brief:

The FBI has charged Gotbit, ZM Quant, CLS Global, and 15 individuals with market manipulation, using a sham token to gather evidence.

Extensive evidence, including recordings and interviews, has led to multiple guilty pleas, arrests, and the seizure of over $25 million in crypto assets.

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FBI Targets Gotbit and Other Firms in Major Crypto Market Manipulation Sting

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In a significant crackdown on crypto market manipulation, federal prosecutors have charged Gotbit, ZM Quant, CLS Global, and 15 individuals with sham trading and fraudulent activities. This unprecedented operation involved the FBI creating a sham token to investigate and substantiate manipulation charges against these firms.

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According to Reuters, this marks the first instance where the FBI has employed such a strategy to target financial service firms involved in crypto manipulation. The operation has resulted in multiple guilty pleas, four arrests, and the seizure of over $25 million in crypto assets.

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Extensive Evidence of Manipulation

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The prosecution's case is backed by extensive evidence, including a teleconference recording of ZM Quant executives discussing strategies to artificially boost trading volumes. Riuqi “Ricky Lau” Liu, a ZM Quant executive, was recorded explaining how they manipulated trading activity to attract users on platforms like Uniswap.

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Gotbit's involvement is further evidenced by a 2019 YouTube interview with CEO Aleksei Andriunin, where he openly described tactics to inflate trade volumes for new tokens. Andriunin's arrest in Portugal underscores the international scope of the investigation.

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The operation's success in gathering such explicit evidence suggests a potential broader crackdown on crypto market manipulation, serving as a high-profile warning to deter future offenses.

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