U.S. federal agencies have charged four crypto market makers and 18 individuals with fraud and market manipulation, including wash trading and unregistered securities offerings.
Three self-proclaimed crypto market-making firms, along with related individuals, have been accused by the U.S. Securities and Exchange Commission (SEC) of fraud and market manipulation in civil lawsuits filed in the U.S. District Court for the District of Massachusetts. The Department of Justice and the Federal Bureau of Investigation (FBI) are also involved in the investigation.
The complaints were filed on October 9, targeting Gotbit Consulting, ZM Quant Investment, and CLS Global. In addition, two separate complaints have been filed against the involved individuals. A total of nine individuals have been charged, according to the SEC's announcement.
Gotbit Consulting and its marketing director Fedor Kedrov are accused of manipulating the market through wash trading to create a false impression of demand for the Saitama and Robo Inu crypto tokens. Wash trading is the practice of self-trading to artificially inflate market interest.
These crypto projects were organized by Vy Pham, a Vietnamese citizen living in California, who is also charged with offering unregistered securities and market fraud. Pham and two associates have agreed to settle the allegations separately.
ZM Quant Investment and CLS Global are similarly charged in relation to NexFundAI, a crypto token created by the FBI, and the SaitaRealty token. Kedrov currently resides in Russia, while the directors of ZM Quant are based in London and Hong Kong. Another individual in the case lives in India.
The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties against all the defendants. Additionally, the FBI has listed other cryptocurrencies under investigation, including Saitama, SaitaRealty, SaitaChain, Robo Inu, VZZN, Lillian Finance, and NexFundAI.
In total, 18 individuals and the company MyTrade MM are facing charges. The founders of VZZN and Lillian Finance are also among the accused, as VZZN is related to Saitama, but there are no other connections to the rest of the investigation.
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The article SEC, FBI, and DOJ coordinate to dismantle 4 fraudulent crypto companies first appeared on CoinMoi.
