The FBI created a virtual currency as part of an investigation into price manipulation in the virtual currency market, the government said Wednesday. The FBI’s Ethereum-based token, NexFundAI, was created with the help of “cooperating witnesses.”
As a result of the investigation, the Securities and Exchange Commission indicted three “market makers” and nine individuals for their alleged involvement in a scheme to inflate the prices of certain crypto assets. The Department of Justice has indicted 18 people and entities for “widespread fraud and manipulation” in the cryptocurrency market.
Prosecutors allege that the defendants made false claims about the tokens and conducted so-called “wash trades” to give the impression of an active trading market. Three market makers, ZM Quant, CLS Global, and MyTrade, allegedly wash-traded or conspired to wash-trade on behalf of NexFundAI, an Ethereum-based token that the FBI did not know was created. .
“What the FBI has uncovered in this case is essentially a new twist on an old financial crime,” Jodi Cohen, special agent in charge of the FBI's Boston Division, said in a statement. “What we have uncovered is the executives of four crypto companies and four crypto individuals accused of spearheading a sophisticated trading scheme that extorted millions of dollars from honest investors. This led to charges against 'market makers' and their employees.”
Liu Zhou, a “market maker” who works with MyTradeMM, told promoters of NexFundAI that MyTradeMM is better than its competitors because it can “control the pump and dump” and “do inside trading easily.” He is said to have said that he was there.
FBI spokesperson said. coin desk There was limited trading activity for the coin, but no additional information was shared. According to reports, at a press conference on Wednesday, Massachusetts Deputy District Attorney Joshua Levy said that the token transactions are no longer valid. coin desk.
The Justice Department reportedly set aside $25 million in “illicit proceeds” that will be returned to investors.
