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Aleksey Andryunin, 26-year-old Russian national and founder of cryptocurrency market maker Gotbit, has been arrested in Portugal at the request of the US. The US Department of Justice accuses him and three other market makers of market manipulation and fictitious trading in cryptocurrency tokens. Andryunin, who is also accused of fraud and money laundering, is awaiting extradition to America.
The US Department of Justice has brought the first-ever criminal charges against financial companies for market manipulation and fictitious trading in the cryptocurrency industry. In Boston, charges were brought against the heads of four cryptocurrency companies, four cryptocurrency financial services firms (so-called market makers), and employees of these firms.
Four of the defendants pleaded guilty, and one more agreed to plead guilty. This week, authorities detained three more defendants in Texas, the UK, and Portugal. More than $25 million in cryptocurrency was seized, and several trading bots that carried out fictitious transactions worth millions of dollars were deactivated.
On the night of October 10, it became known that Alexey Andryunin, the head of the cryptocurrency market maker Gotbit, was detained in Portugal at the request of the United States.
Gotbit and three other companies — ZM Quant, CLS Global, and MyTrade — provided market making and liquidity services for cryptocurrency tokens in one form or another.
All companies are accused of market manipulation, in particular, fictitious transactions (wash trading) to artificially inflate trading volumes for tokens, RBC explains. Each of the companies mainly worked with low-liquidity second-tier crypto assets and memecoins.
What Alexey Andryunin is accused of
According to court documents, Gotbit was a well-known cryptocurrency market maker founded and CEO by Alexey Andryunin, 26, who holds Russian and Portuguese citizenship. He was arrested in Portugal on October 8 and is now awaiting extradition to the United States. Two other Russians from Gotbit were also arrested: market creation director Fyodor Kedrov and sales director Kavi Jalili.
They are charged with wire fraud and conspiracy to commit market manipulation and fraud.
Andryunin is also charged in a separate criminal case with wire fraud, conspiracy to commit market manipulation and fraud and conspiracy to commit money laundering.
According to the prosecution, Gotbit provided market manipulation and wash trading services to several cryptocurrency companies, including companies based in the United States, from 2018 to 2024. Gotbit allegedly executed millions of dollars in wash trades on behalf of clients and received tens of millions of dollars in revenue for these illegal services.
In a 2019 interview, Andryunin described how he developed code to wash trade and artificially inflate cryptocurrency trading volume. Andryunin tracked Gotbit’s market manipulation, including using spreadsheets that compared “created volume” from wash trades to natural “market volume”. Gotbit employees, including Jalili and Kedrov, described these wash trading tactics and how to avoid detection to potential clients.
Operation Token Mirrors
“This investigation, the first of its kind, has exposed numerous fraudulent actors in the cryptocurrency industry. Wash trading has long been illegal in financial markets, and cryptocurrency is no exception,” said Acting U.S. Attorney Joshua Levy.
In his words, these are cases “where an innovative technology — cryptocurrency — collides with a century-old scheme — pump and dump.”
“The message today is: If you make false statements to deceive investors, that’s fraud. Period. This agency will aggressively pursue fraud, including in the cryptocurrency industry,” Levy promised.
To investigate Gotbit and other cryptocurrency companies, the FBI created its own crypto token, NexFundAI, and registered a company of the same name. Under its name, the FBI entered into an agreement to prove facts of volume inflation and market manipulation.
According to FBI agent Jody Cohen, who participated in the investigation, “The FBI took the unprecedented step of creating its own crypto token and company to identify, stop, and prosecute these alleged fraudsters.”
“What the FBI uncovered in this case is essentially a new twist on old-school financial crime. “Operation Token Mirrors was aimed at unscrupulous token developers, promoters, and market makers in the crypto space,” the FBI agent said.
Source
The US Department of Justice has brought the first-ever criminal charges against financial companies for market manipulation and fictitious trading in the cryptocurrency industry. In Boston, charges were brought against the heads of four cryptocurrency companies, four cryptocurrency financial services firms (so-called market makers), and employees of these firms.
Four of the defendants pleaded guilty, and one more agreed to plead guilty. This week, authorities detained three more defendants in Texas, the UK, and Portugal. More than $25 million in cryptocurrency was seized, and several trading bots that carried out fictitious transactions worth millions of dollars were deactivated.
On the night of October 10, it became known that Alexey Andryunin, the head of the cryptocurrency market maker Gotbit, was detained in Portugal at the request of the United States.
Gotbit and three other companies — ZM Quant, CLS Global, and MyTrade — provided market making and liquidity services for cryptocurrency tokens in one form or another.
All companies are accused of market manipulation, in particular, fictitious transactions (wash trading) to artificially inflate trading volumes for tokens, RBC explains. Each of the companies mainly worked with low-liquidity second-tier crypto assets and memecoins.
What Alexey Andryunin is accused of
According to court documents, Gotbit was a well-known cryptocurrency market maker founded and CEO by Alexey Andryunin, 26, who holds Russian and Portuguese citizenship. He was arrested in Portugal on October 8 and is now awaiting extradition to the United States. Two other Russians from Gotbit were also arrested: market creation director Fyodor Kedrov and sales director Kavi Jalili.
They are charged with wire fraud and conspiracy to commit market manipulation and fraud.
Andryunin is also charged in a separate criminal case with wire fraud, conspiracy to commit market manipulation and fraud and conspiracy to commit money laundering.
According to the prosecution, Gotbit provided market manipulation and wash trading services to several cryptocurrency companies, including companies based in the United States, from 2018 to 2024. Gotbit allegedly executed millions of dollars in wash trades on behalf of clients and received tens of millions of dollars in revenue for these illegal services.
In a 2019 interview, Andryunin described how he developed code to wash trade and artificially inflate cryptocurrency trading volume. Andryunin tracked Gotbit’s market manipulation, including using spreadsheets that compared “created volume” from wash trades to natural “market volume”. Gotbit employees, including Jalili and Kedrov, described these wash trading tactics and how to avoid detection to potential clients.
Operation Token Mirrors
“This investigation, the first of its kind, has exposed numerous fraudulent actors in the cryptocurrency industry. Wash trading has long been illegal in financial markets, and cryptocurrency is no exception,” said Acting U.S. Attorney Joshua Levy.
In his words, these are cases “where an innovative technology — cryptocurrency — collides with a century-old scheme — pump and dump.”
“The message today is: If you make false statements to deceive investors, that’s fraud. Period. This agency will aggressively pursue fraud, including in the cryptocurrency industry,” Levy promised.
To investigate Gotbit and other cryptocurrency companies, the FBI created its own crypto token, NexFundAI, and registered a company of the same name. Under its name, the FBI entered into an agreement to prove facts of volume inflation and market manipulation.
According to FBI agent Jody Cohen, who participated in the investigation, “The FBI took the unprecedented step of creating its own crypto token and company to identify, stop, and prosecute these alleged fraudsters.”
“What the FBI uncovered in this case is essentially a new twist on old-school financial crime. “Operation Token Mirrors was aimed at unscrupulous token developers, promoters, and market makers in the crypto space,” the FBI agent said.
Source
