Federal prosecutors have made a significant move in the world of cryptocurrency, charging two alleged market makers, several crypto projects, and a group of individuals with manipulating various crypto markets. The charges were brought forth on Wednesday, revealing a scheme in which the accused profited from fees and selling manipulated coins at inflated values.
According to the charging documents that were unveiled, Gotbit and ZM Quant engaged in wash trading of various tokens to create a facade of legitimate activity. They then proceeded to sell these tokens at artificially inflated prices to unsuspecting buyers, while also promoting them on different platforms and persuading exchanges to allow them to purchase tokens at reduced fees.
It was uncovered that both Gotbit and ZM Quant presented themselves as reputable market makers providing legal services to their clients. However, behind the scenes, they were offering illegal services such as wash trading to boost token volume and prices artificially.
In the case of Gotbit, the illegal activities were not kept under wraps. In 2019, one of the co-founders, Alexey Andryunin, who was only a 20-year-old college student at the time, openly explained to CoinDesk the ins and outs of the wash trading services that the company offered. He did not shy away from admitting the unethical nature of their business, as Gotbit was not registered in any jurisdiction due to its questionable practices.
Among the tokens that were manipulated as part of this scheme was robo inu, which experienced a surge in price following the indictment.
This revelation sheds light on the darker side of the cryptocurrency market, where manipulation and deceit can have far-reaching consequences. It serves as a reminder for investors and traders to exercise caution and conduct thorough research before engaging with any crypto projects or market makers.
The implications of these charges are yet to be fully realized, but they serve as a warning to those who engage in fraudulent activities within the crypto space. Authorities are cracking down on such practices, aiming to create a more transparent and trustworthy environment for all participants in the market.