New York, Monday, October 21, 2024 – The Securities and Exchange Commission (SEC), in collaboration with the FBI and the Department of Justice, has charged 18 crypto firms, including Gotbit, with market manipulation.
The firms, which also include ZM Quant, CLS Global, and MyTrade MM, are accused of orchestrating wash trading schemes to inflate the trading volumes of various cryptocurrencies.
The SEC’s complaint, filed on October 9, details how these companies used bots to artificially boost volumes on centralized exchanges (CEXs), deceiving investors.
In addition, the Massachusetts U.S. Attorney’s office has named individuals from meme coin projects Saitama and Robo Inu in related charges. Notable names include Russell Armand, Maxwell Hernandez, Manpreet Kohli, and Nam Tran, who allegedly facilitated the manipulation services.
Authorities have seized $25 million in cryptocurrency and dismantled bots responsible for generating billions in fake transactions daily across 60 crypto assets. The case marks a significant crackdown on fraudulent market-making services within the crypto industry.
Gotbit and its counterparts allegedly ran “pump and dump” schemes, where they artificially inflated the value of tokens, encouraging new investors to buy in, only to sell off at inflated prices. The investigation revealed a network of market manipulators who used bots to create quadrillions of fake transactions. This widespread manipulation ultimately led to massive losses for unsuspecting retail investors.
The crackdown is part of a broader initiative by U.S. regulators to address crypto market fraud, with the SEC and other agencies increasingly focusing on prosecuting market manipulators. These schemes, which have targeted retail investors, pose significant risks in the fast-evolving world of digital assets.
The SEC’s actions follow growing concerns about the vulnerability of the crypto market to manipulation and fraud.
