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The U.S. Securities and Exchange Commission (SEC) has opened a legal investigation against Citron Research and its chief executive, Andrew Left, on suspicion of manipulating asset prices on the NFT platform of gaming retailer GameStop.
The SEC filed a lawsuit in the US District Court for the Central District of California against crypto trader Andrew Left and his company Citron Capital for organizing and participating in a multi-year fraud scheme that could bring the suspect about $20 million.
The regulator accused Left of deliberately deceiving subscribers by publishing false and misleading recommendations on NFT trading on the site of the game retailer GameStop.
The SEC complaint alleges that Left used Citron Research's official website and related social media platforms at least 26 times to publicly recommend that his subscribers take long or short positions in digital assets, and then traded against them.
"Andrew Left used the trust of unsophisticated investors for personal gain to persuade them to trade on false market signals, and then quickly change the direction of trading on the GameStop platform and profit from price movements. We have uncovered these alleged spoofing tactics that generated approximately $20 million in fraudulent profits for Left and his firm," said Kate Zoladz, director of the SEC's Los Angeles Regional office.
The SEC spokeswoman added that Left boasted to colleagues that certain statements were particularly effective at encouraging retail investors to trade based on his recommendations, and it was like taking candy away from a child.
As part of a parallel lawsuit, the Department of Justice's Anti-Fraud Division and the U.S. Attorney's Office for the Central District of California announced that they have opened their own investigation into the allegations made against Andrew Left.
Earlier, US gaming retailer GameStop warned users that it was discontinuing support for non-fungible tokens on its NFT platform due to regulatory uncertainty.
The SEC filed a lawsuit in the US District Court for the Central District of California against crypto trader Andrew Left and his company Citron Capital for organizing and participating in a multi-year fraud scheme that could bring the suspect about $20 million.
The regulator accused Left of deliberately deceiving subscribers by publishing false and misleading recommendations on NFT trading on the site of the game retailer GameStop.
The SEC complaint alleges that Left used Citron Research's official website and related social media platforms at least 26 times to publicly recommend that his subscribers take long or short positions in digital assets, and then traded against them.
"Andrew Left used the trust of unsophisticated investors for personal gain to persuade them to trade on false market signals, and then quickly change the direction of trading on the GameStop platform and profit from price movements. We have uncovered these alleged spoofing tactics that generated approximately $20 million in fraudulent profits for Left and his firm," said Kate Zoladz, director of the SEC's Los Angeles Regional office.
The SEC spokeswoman added that Left boasted to colleagues that certain statements were particularly effective at encouraging retail investors to trade based on his recommendations, and it was like taking candy away from a child.
As part of a parallel lawsuit, the Department of Justice's Anti-Fraud Division and the U.S. Attorney's Office for the Central District of California announced that they have opened their own investigation into the allegations made against Andrew Left.
Earlier, US gaming retailer GameStop warned users that it was discontinuing support for non-fungible tokens on its NFT platform due to regulatory uncertainty.
