Man
Professional
- Messages
- 2,965
- Reaction score
- 488
- Points
- 83
Investigators showed ingenuity to uncover a scam worth millions of dollars.
On Wednesday, US law enforcement officers released the results of the operation to catch cryptocurrency scammers. An investigation conducted by the FBI revealed a sophisticated scheme for manipulating the prices of digital assets.
The operation was not ordinary, but with a twist. The FBI has created its own Ethereum-based token called NexFundAI. The agents developed the cryptocurrency with the support of "cooperating witnesses" to infiltrate the criminal environment and gather irrefutable evidence of illegal activity.
As a result of the investigation, the US Securities and Exchange Commission (SEC) brought charges against three market makers and nine individuals. At the same time, the US Department of Justice has charged 18 individuals and organizations with "large-scale fraud and manipulation" in the cryptocurrency markets.
According to the investigation, the defendants spread misinformation about their tokens and conducted so-called wash trades - fictitious transactions between affiliates. The purpose of such manipulations is simple: to create the appearance of active trading. Three market makers - ZMQuant, CLS Global, and MyTrade - allegedly participated in similar operations with the NexFundAI token, unaware of the FBI's involvement in its creation.
Jody Cohen, the special agent who heads the FBI's Boston office, described the scheme as "a modern version of classic financial crime." She noted that the suspects managed to organize a complex trading scheme, which, according to the investigation, deceived bona fide investors for millions of dollars.
Of particular note is the case of Liu Zhou, a market maker who collaborated with MyTrade MM, who allegedly boasted to NexFundAI's promoters that his company was superior to the competition because they "controlled the pump and dump," which made it easy to carry out insider trades.
An FBI spokesperson told CoinDesk that trading activity with the token was limited, but refrained from further comment. Joshua Levy, Acting U.S. Attorney for the District of Massachusetts, said at a press conference on Wednesday that token trading has been suspended. According to reports, the Department of Justice managed to seize $25 million in illegally obtained proceeds. Now they plan to return them to affected investors.
Source
On Wednesday, US law enforcement officers released the results of the operation to catch cryptocurrency scammers. An investigation conducted by the FBI revealed a sophisticated scheme for manipulating the prices of digital assets.
The operation was not ordinary, but with a twist. The FBI has created its own Ethereum-based token called NexFundAI. The agents developed the cryptocurrency with the support of "cooperating witnesses" to infiltrate the criminal environment and gather irrefutable evidence of illegal activity.
As a result of the investigation, the US Securities and Exchange Commission (SEC) brought charges against three market makers and nine individuals. At the same time, the US Department of Justice has charged 18 individuals and organizations with "large-scale fraud and manipulation" in the cryptocurrency markets.
According to the investigation, the defendants spread misinformation about their tokens and conducted so-called wash trades - fictitious transactions between affiliates. The purpose of such manipulations is simple: to create the appearance of active trading. Three market makers - ZMQuant, CLS Global, and MyTrade - allegedly participated in similar operations with the NexFundAI token, unaware of the FBI's involvement in its creation.
Jody Cohen, the special agent who heads the FBI's Boston office, described the scheme as "a modern version of classic financial crime." She noted that the suspects managed to organize a complex trading scheme, which, according to the investigation, deceived bona fide investors for millions of dollars.
Of particular note is the case of Liu Zhou, a market maker who collaborated with MyTrade MM, who allegedly boasted to NexFundAI's promoters that his company was superior to the competition because they "controlled the pump and dump," which made it easy to carry out insider trades.
An FBI spokesperson told CoinDesk that trading activity with the token was limited, but refrained from further comment. Joshua Levy, Acting U.S. Attorney for the District of Massachusetts, said at a press conference on Wednesday that token trading has been suspended. According to reports, the Department of Justice managed to seize $25 million in illegally obtained proceeds. Now they plan to return them to affected investors.
Source
