Catenaa, Sunday, January 26, 2025 – Dubai-based crypto market maker CLS Global will plead guilty to charges of market manipulation and wire fraud related to wash trading on the decentralized exchange Uniswap, federal prosecutors announced Wednesday 22.
The company, which was targeted in an FBI sting operation, agreed to pay over $428,000 in penalties and forfeited assets as part of a plea deal. CLS Global will also face a ban on offering services to US investors and must file annual compliance certifications.
The investigation revealed that CLS provided market-making services for NexFundAI, a fake digital currency company created by the FBI. Employees admitted to using an algorithm to conduct wash trading, generating artificial trading volume to meet exchange listing requirements and attract investors.
The company allegedly used multiple wallets to make transactions appear organic.
The operation is part of a broader effort to combat wash trading in the crypto industry. CLS Global was one of three firms investigated, marking the first criminal charges for market manipulation against financial services companies in the sector.
The SEC has also filed a civil enforcement action against CLS, seeking penalties and the disgorgement of alleged ill-gotten gains.
