By U.S. federal prosecutors in Boston have unveiled charges against three cryptocurrency companies and 15 individuals in a sweeping crackdown on digital asset fraud and market manipulation. The investigation, which led to four arrests and agreements by five people to plead guilty, also resulted in the seizure of over $25 million worth of cryptocurrency.
Acting U.S. Attorney Joshua Levy announced that the defendants, associated with firms Gotbit, ZM Quant, CLS Global, and others, engaged in sham trades to artificially inflate the trading volume of various cryptocurrency tokens before selling them off, leaving unsuspecting investors with significant losses.
“This is a case where new age technology, crypto, meets an old school fraud, in this case a ‘pump and dump’ scheme, which is as old as the stock markets,” Levy told reporters.
In a groundbreaking move, the FBI directed the creation of a cryptocurrency company, NexFundAI, with its own token on the Ethereum blockchain. This decoy was used to lure ZM Quant, CLS Global, and another company, MyTrade, into agreeing to help manipulate its value. Authorities closely monitored the token’s trading to minimize risk to retail investors before disabling transactions.
Among those charged is Manpreet Kohli, CEO of Saitama, arrested in the United Kingdom. Saitama, the largest company implicated, allegedly reached a market value of $7.5 billion through manipulative practices. Five other current or former Saitama employees face charges, with three already pleading guilty.
Aleksei Andriunin, CEO of Gotbit, a cryptocurrency “market maker,” was arrested in Portugal. Prosecutors allege that from 2018 to 2024, Gotbit engaged in “wash trading” and market manipulation for several cryptocurrency clients.
Other notable individuals charged include Liu Zhou, founder of market maker MyTrade, who has agreed to plead guilty; Riqui Liu and Baijun Ou of ZM Quant, based in the United Kingdom and Hong Kong; Andrey Zhorzhes of CLS Global, residing in the United Arab Emirates; Michael Thompson of Virginia, associated with VZZN; and Bradley Beatty of Florida, accused of fraudulently promoting Lillian Finance.
The U.S. Securities and Exchange Commission has filed related civil cases in conjunction with the criminal charges.
