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The FBI has uncovered a “wash trading” syndicate. The syndicate comprised token developers, promoters, and market makers. Four of the arrested suspects have pleaded guilty. The Federal Bureau of Investigation (FBI) has exposed a wash trading operation involving crypto token developers, promoters, and market makers. According to a report from the U.S. Department of Justice (DOJ), four cryptocurrency companies, four market makers, and their employees allegedly conspired to manipulate crypto users and steal substantial amounts of money. Kaiko Research, the crypto data analysis firm, provided insights on how the FBI systematically tracked the suspects. According to Kaiko Research, the FBI created a DeFi firm, NexFundAI and released a native token, using the process to track and expose what the DOJ described as a first-of-a-kind occurrence in the crypto sector.  First a recap. 18 individuals and entities face charges after an FBI-led investigation. These individuals and their firms engaged in algorithmic wash trading, pump and dump schemes, and other manipulative tactics, often on DeFi exchanges like Uniswap. — Kaiko (@KaikoData) October 17, 2024 FBI Exposes Wash Trading Tactics In what Kaiko called a prime example of wash trading in DeFi, the FBI’s undercover project revealed how crypto tokens flowed from NexFundAI to market makers’ wallets and then to numerous other wallets. These funds were then used for wash trading on the token’s only secondary market, which was set up by the issuer on Uniswap. The FBI reportedly identified 18 individuals who played various roles in the Wash Trading Pump-and-Dump scheme. The charging documents against the alleged fraudsters stated that they created cryptocurrency companies and made false statements about their native tokens. Continuing with their scheme, the suspects executed sham trades in those tokens to create the illusion of trading activity and make the tokens appear like profitable investments. Read also: Binance…

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Filed under: News - @ October 18, 2024 1:25 pm