- Numerous token projects are attempting to distance themselves from the market maker Gotbit after it was charged with market manipulation and wash trading by U.S. authorities.
- The meme coin project Neiro announced it has halted its relationship with Gotbit, claiming none of the issues involving Gotbit are relevant to Neiro.
- Other meme coin projects like BMS and BEER also made statements condemning Gotbit and asserting they have cut ties with the company, despite previously relying on it for liquidity and marketing.
Numerous token projects now claim they have severed ties with market maker Gotbit after it was hit with market manipulation charges.
Gotbit’s Reputation
In particular, token teams that partnered with Gotbit have started issuing statements vigorously disavowing the firm they depended on for liquidity.
“We have halted our relationship with Gotbit, who were our market maker partners,” the Ethereum meme coin project Neiro posted on Twitter Friday. “None of the issues involving Gotbit or its employees involve or are relevant to Neiro in any capacity.”
Members of the crypto community were not so quick to accept Neiro’s assurances. The pseudonymous on-chain sleuth ZachXBT soon after excoriated Neiro for partnering with Gotbit prior to this week’s charges, despite the fact that concerns about the market maker have been public knowledge for over a year.
Other meme coin projects jumped on Friday to make clear they didn’t want to associate with Gotbit any longer, despite the fact that the self-described hedge fund and meme coin market maker still exercised substantial control over their tokens.
Gotbit’s Alleged Misconduct
The US Department of Justice (DOJ) has accused Gotbit of making illegal wash trades with digital tokens to artificially inflate the tokens’ prices before selling off the tokens in alleged pump and dump schemes.
The US Securities and Exchange Commission (SEC) further accused Gotbit of providing on-demand market manipulation by generating fake daily trading volume, often in the millions of dollars, by essentially trading crypto assets with itself.
Even meme coins that claim to have stopped working with Gotbit prior to this week made a point of emphasizing their condemnation of the company’s alleged conduct.
Conclusion
The allegations probably surprised very few. Back in 2019, Gotbit co-founder Alexey Andryunin openly told CoinDesk in detail about his company’s business model: manipulating crypto markets for a fee to increase the perceived legitimacy of obscure tokens.
“The business is not entirely ethical,” Andryunin said at the time.
