Crypto Market Maker Fined for FBI Bait Token Manipulation
CLS Global,a crypto market maker based in the UAE,has been fined $428,000 for wash trading. The FBIâs bait token, NexFundAI, was at the centre of this illegal activity. On April 2, a federal court in Boston handed down the sentence on CLS Global for artificially inflating trading volumes.
NexFundAI was part of the FBIâs âOperation Token Mirrors,â launched in March 2024. The operation aimed to catch companies involved in fraudulent trading practices. In October 2024, the U.S. Securities and Exchange Commission (SEC) filed fraud charges against CLS Global and others, including ZM Quant Investment and Gotbit Consulting.
The FBI confiscated $25 million in cryptocurrency and shut down several wash trading bots. Besides the fine, CLS Global faces a three-year probation and a ban on U.S.services. The company pleaded guilty in January.
Wash trading is a meaningful issue in the crypto market. Chainalysis estimates it accounts for $2.57 billion in trading volumes. Authorities are cracking down on this practice. For instance, Galaxy Digital settled for $200 million over LUNA token manipulation.
Justin Sun was also accused of manipulating BitTorrent (BTT) and Tron (TRX) markets. However, his case is on hold. These actions show the ongoing efforts to regulate the crypto market and prevent fraudulent activities.
