The post FBI Creates Crypto Token to Expose Fraud, Leads to Major Market Manipulation Charges appeared on BitcoinEthereumNews.com.

In a groundbreaking move, the FBI created its own cryptocurrency token, NexFundAI, to infiltrate and expose fraudulent actors within the crypto market. The undercover operation, codenamed “Operation Token Mirrors,” has culminated in U.S. prosecutors charging 18 individuals and entities, including four major crypto firms—Gotbit, ZM Quant, CLS Global, and MyTrade—for alleged market manipulation and fraudulent trading practices. These firms are accused of engaging in widespread fraud, including “wash trading” schemes that misled investors and artificially inflated the value of over 60 cryptocurrencies. The FBI, known for its innovative tactics in combating crime, took the unprecedented step of establishing NexFundAI on the Ethereum blockchain. The bureau created a website for the token, designed to appear like any other cryptocurrency project, complete with detailed descriptions of the token’s purpose and potential. However, this token was a trap to attract fraudulent crypto firms that specialized in inflating trading volumes and prices for profit. Source: NexFundAI via FBI “The FBI took the unprecedented step of creating its very own token and company to identify, disrupt, and bring these alleged fraudsters to justice,” stated Jodi Cohen, Special Agent in Charge of the FBI’s Boston Division, in a press release. Wash Trading and Market Manipulation Wash trading, a practice where traders simultaneously buy and sell an asset to create artificial trading activity, is at the heart of the charges. The conspirators allegedly inflated the value of tokens like the Saitama Token, which once boasted a market capitalization of $7.5 billion. They then executed “pump and dump” schemes, manipulating prices upward to attract unwary investors before selling off their holdings at the inflated values, leaving investors with losses. The firms behind these fraudulent activities, including ZM Quant and Gotbit, are accused of facilitating this manipulation by hiring market makers to execute sham trades. These companies allegedly used…

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Filed under: News - @ October 11, 2024 5:25 am