FBI creates fake token to catch 18 people and companies involved in crypto fraud
The post FBI creates fake token to catch 18 people and companies involved in crypto fraud appeared on BitcoinEthereumNews.com.
The U.S. government has indicted 18 individuals and companies for fraud and market manipulation in the crypto industry. Charges were unsealed in Boston, targeting leaders from four cryptocurrency firms and four financial service companies known as “market makers.” These market makers, alongside employees of the crypto firms, are accused of orchestrating a massive fraud that involved manipulating the prices of crypto tokens through a series of sham trades, known as wash trades. Fraudulent trading tactics and pump and dump schemes Four of the defendants have already pleaded guilty, while another has agreed to do the same. Meanwhile, three more defendants have been apprehended in Texas, the UK, and Portugal. So far, authorities have seized over $25 million in crypto and disabled many bots responsible for carrying out millions of dollars in wash trades across approximately 60 different tokens. According to the charging documents, the accused companies engaged in deceptive practices to inflate the value of their tokens. Once the prices of these tokens were artificially inflated, the defendants sold off their holdings at the higher prices in what is commonly referred to as a “pump and dump” scheme. One of the largest companies involved in this fraud, Saitama, at one point had a market valuation running into billions. One of the market makers, who has already agreed to plead guilty, reportedly described the strategy to a potential client, explaining that their goal on the secondary market was to attract buyers who did not know they were being scammed. The market maker explained that in order for them to make any profit, they needed to make other buyers lose money. ZM Quant, CLS Global, and MyTrade, and their employees were charged with wash trading and conspiring to wash trade tokens created by NexFundAI. NexFundAI was a fake crypto company and token…
Filed under: News - @ October 9, 2024 10:19 pm