Cryptocurrency projects are promising and profitable. The popularity of crypto projects and decentralized finance is now at its finest position. That is why the crimes associated with these projects too are increasing. The latest trends of scams and crimes are mainly associated with these blockchain technology applications and services.
To prevent scams and crypto market manipulation, the US Federal Bureau of Investigation(FBI) conducted an enforcement action that ultimately led to the arrests and charges of multiple individuals and entities.
This news was confirmed by the U.S. Department of Justice(DoJ) later. The US government press release starts with the statement that says “First-ever criminal charges against financial services firms for market manipulation and “wash trading” in the cryptocurrency industry”
Operation Token Mirrors: An Unprecedented Move from the FBI
FBI is well known for its methods and strategic implementation in enforcing law and order. Operation Token Mirrors is a unique strategic operation conducted by the FBI to prevent fraudulent activities related to the crypto market.
The undercover operation was a success and they charged 18 individuals and entities as part of the final verdict of the investigation. The presence of major crypto firms in the FBI list is the talk in the crypto world. The big names that are included in the list for alleged market manipulation and scams related to trading practices are, Gotbit, ZM Quant, CLS Global, and MyTrade.
The tactics used by the FBI to combat the crypto market crimes involve creating a bait cryptocurrency token and company called NexFundAI. This was created by the direction of law enforcement as part of the government’s investigation. The US government is closely monitoring the Crypto markets and scams associated with them.
The message of the acting United States Attorney Joshua Levy is like this, “if you make statements to trick investors, that’s fraud. Period. Our office will aggressively pursue fraud, including in the cryptocurrency industry”. These words from Joshua Levy indicate that there will be future monitoring and further follow-ups regarding blockchain-related online fraudulent activities.
As a result of this investigation, a total number of 18 individuals and organizations were ambushed. Besides that, more than $25 million in cryptocurrency was seized, and found that the firms were doing wash trading, which is a form of market manipulation technique of artificially inflating and pumping the trading volume of a particular cryptocurrency. The 60% of cryptocurrency that was under the observation of Operation Token Mirrors has been disabled now.
Information on alleged and charged individuals and firms
some individuals and their representative firms were part of this market manipulation and wash trading. The associated personnel information is below,
- Liu Zhou- MyTrade MM
- Robo Inu Finance
- Bradley Beatty- Lillian Finance LLC
- Aleksei Andriunin- Gobit Consulting LLC
- Fedor Kedrov- Gobit Consulting LLC
- Qawi Jalili- Gobit Consulting LLC
- Manpreet Kohli- Saitama LLC
- Haroon Mohsini- Saitama LLC
- Max Hernandez-Saitama LLC
- Nam Tran- Saitama LLC
- Russel Armand-Saitama LLC
- Vy Pham-Saitama LLC
- Michael Thompson- VZZN
- Andrey Zorzhes
- CLS Global FZC
- Riqui Liu-ZM Quant
- Baijun Ou-ZM Quant
- ZM Quant Investment
According to the press release of the U.S. Attorney’s Office, the District of Massachusetts, Gotbit was a well-known market maker in the cryptocurrency industry. The founder Aleksei Andriunin was arrested in Portugal and waiting for further procedures.
Other figures related to Gotbit along with Aleksei Andriunin were charged with wire fraud and conspiracy to commit market manipulation and wire fraud. Gotbit has been actively involved in market manipulation and the wash trading service to some of the fraudulent cryptocurrency companies since 2018.
The U.S. and FBI had received helping hands in the form of legal attachments from the Federal Bureau of Investigation of Madrid and London, Portugal’s Policia Judiciaria European Network of Fugitive Active Search Team, the National Extradition unit, and National Cryptocurrency Enforcement Team of the United Kingdom to find the evidence against them.
Conclusion
Cryptocurrency is emerging as a new financial alternative to our conventional finance system. The popularity of crypto projects and their native tokens is increasing daily, and so is the related crime. Just because crypto projects and transactions in the system are decentralized, that doesn’t mean they should not be monitored. Now most of the countries are giving priority to decentralized finance and cryptocurrency. So ensuring the safety of individuals associated with it becomes the government’s obligation.
FBI’s innovative method of creating a bait cryptocurrency will be remembered for ages and followed by the other countries in the future. It is always the decision of the individual that matters here the most. They should be vigilant and aware of the scams related to the crypto industry. The words from Joshua Levy show the seriousness of the problem and his words end like this,
“These charges are also a stark reminder of how vigilant online investors must be and that doing your homework before diving into the digital frontier is critical. People considering making investments in the cryptocurrency industry should understand how these scams work so that they can protect themselves.”
