Boston prosecutors have charged three cryptocurrency companies—Gotbit, ZM Quant, and CLS Global—along with 15 individuals for extensive fraud and market manipulation. This development follows an unprecedented investigation in which the FBI created a new digital token to expose criminal activities.
The charges stem from allegations that the companies engaged in wash trading with digital tokens to artificially inflate prices, thereby attracting new investors. Prosecutors reported that four arrests were made, and five plea agreements have been reached, with authorities seizing over $25 million in cryptocurrency.
Key Arrests and Allegations
Among those arrested is Manpreet Kohli, CEO of Saitama, which previously boasted a market value in the billions. Kohli was apprehended in the UK on Monday, while five other current or former employees have also been charged, three of whom have pleaded guilty. Aleksei Andriunin, CEO of Gotbit, was arrested in Portugal, alongside two of his company’s employees in Russia.
Prosecutors allege that from 2018 to 2024, Gotbit engaged in wash trading and market manipulation for various cryptocurrency clients, artificially inflating trading volumes for their tokens. “These are cases where innovative technology—cryptocurrency—met a century-old scheme: the pump and dump,” stated Acting U.S. Attorney Joshua Levy. “If you deceive investors with false statements, that’s fraud.”
Manipulative Tactics Revealed
The crypto companies reportedly hired “market makers” to engage in wash trading for payment. One defendant, who agreed to plead guilty, explained to a potential client that the goal was to manipulate secondary markets to profit at the expense of unsuspecting buyers.
FBI’s Innovative Investigation
As part of their investigation, the Department of Justice revealed that the FBI created a token named NexFundAI, leading to claims that ZM Quant, CLS Global, and MyTrade engaged in wash trading or conspired to do so to make trading figures appear more favorable. Gotbit’s CEO and two directors are also implicated in similar activities.
In addition, four individuals associated with cryptocurrency market makers have been charged for advertising market manipulation services. This includes Liu Zhou, founder of MyTrade, who has agreed to plead guilty, as well as Riqui Liu and Baijun Ou, both affiliated with ZM Quant, and Andrey Zhorzhes from CLS Global. Other charged individuals include Michael Thompson of Virginia, connected to a crypto company founded by a former Saitama employee, and Bradley Beatty of Florida, accused of fraudulently promoting his crypto venture, Lillian Finance.
