18 companies and individuals have been charged with fraud and manipulation in the cryptocurrency market.
The charges, unearthed in Boston, concern the executives of four crypto companies, four crypto financial services companies known as “market makers,” and the employees of those companies, the District of Massachusetts said. The prosecutor’s office made the announcement on Wednesday (October 29). 9) Press release.
Four defendants pleaded guilty, another agreed to plead guilty, and the remaining three were arrested by authorities this week, the release said.
Additionally, more than $25 million in virtual currency was seized and multiple trading bots were disabled, the release states.
According to the indictment, the defendants, who founded the cryptocurrency companies Saitama, Robo Inu, VZZN, and Lillian Finance, committed sham transactions (“wash trades”) of tokens and made false statements about the tokens. , alleges that it disguised its tokens as good investments. release.
According to the release, the market makers (ZM Quant, CLS Global, MyTrade MM, Gotbit) have been charged with wash trading and/or collusion.
“Wash trading has long been illegal in financial markets, and cryptocurrencies are no exception,” Acting U.S. Attorney Joshua Levy said in a release. “These are cases where cryptocurrencies, a revolutionary technology, have run into a century-old scheme: pump-and-dump. Today’s message is that if you make false statements to deceive investors, , that’s a scam.
PYMNTS, August 2022 Overview of Cryptocurrency Market Manipulation, describes a pump-and-dump scheme in which a manipulator spreads rumors, a flurry of purchases drives up the price, and then the manipulator sells and the price crashes. reported.
According to the report, in wash trading, individuals or groups buy tokens, resell them at progressively higher prices, and then dump them.
As part of a government investigation, the FBI established a token with a cryptocurrency company, according to a Wednesday press release.
“The FBI has taken the unprecedented step of creating its own virtual currency token and company to identify, disrupt, and bring these fraud suspects to justice,” said Jodi, Special Agent in Charge of the FBI’s Boston Division. Cohen said in a release.
See more: CLS Global, Crypto Fraud, Cryptocurrency, FBI, Gotbit, Jody Cohen, Joshua Levy, Department of Justice, Lillian Finance, Market Manipulation, MyTrade MM, News, Pump and Dump, PYMNTS News, Robo Inu, Saitama, VZZN, Wash Trade, What’s Hot, ZM Quant
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