- • Four cryptocurrency companies and 14 individuals have been charged in the first criminal prosecution of financial services firms for market manipulation and sham trading in the crypto sector.
- • The companies charged are Gotbit, ZM Quant, CLS Global, and MyTrade, along with their leaders and employees.
- • Five people have already agreed to plead guilty or have done so.
The US government has filed criminal charges against four cryptocurrency companies and 14 individuals in the first prosecution of financial services firms for market manipulation and sham trading in the crypto sector.
Background
On Wednesday, federal prosecutors in Boston charged the firms Gotbit, ZM Quant, CLS Global and MyTrade and their leaders and employees. The takedown also involved arrests overseas.
Five people have already agreed to plead guilty or have done so.
Details of the Charges
The companies and individuals were charged with conspiracy to commit commodities and securities fraud as well as wire fraud.
Prosecutors said the defendants manipulated cryptocurrency prices and cheated investors through schemes such as “ramping” – buying up tokens to similate market interest.
They also engaged in “wash trading” – buying and selling with themselves to create the illusion of trading volume.
Response
This criminal prosecution demonstrates the US government’s efforts to crack down on fraud and manipulation in the cryptocurrency sector. The charges send a message that such activities will not be tolerated as digital assets grow in popularity and adoption.
