US accuses 4 firms, 14 people with crypto fraud

Four cryptocurrency organizations and 14 people have been accused in what US authorities call the first criminal case involving market manipulation and fraudulent trading in the cryptocurrency sector. According to Reuters, the businesses involved—Gotbit, ZM Quant, CLS Global, and MyTrade—are accused of participating in fraudulent tactics to manipulate cryptocurrency markets. The US Department of Justice in Boston revealed the accusations after an exhaustive investigation that resulted in international arrests. Five individuals have pled guilty or agreed to do so. Some people in the indictment lived in Hong Kong and the United Kingdom, while others were in the United States.

Unlawful cryptocurrency operations

According to the indictment sheet, the alleged practices included using several wallets, online marketing, messaging apps, manipulative trades, market manipulation, illicit advertising, and artificially inflating cryptocurrency values to deceive investors. One of the major companies involved, Gotbit, has been accused of acting unethically on many occasions. The business is no new to scandal, having previously been connected to many "rug pull" frauds in which developers disappeared with investor monies. Gotbit has admitted to unethical business activities, reinforcing its crypto notoriety. US-based ZM Quant supplied market-making services. Court records claim these businesses engaged in wash trading, phony volume to inflate token values and investor misrepresentation. These allegations raise worries about crypto market integrity since federal prosecutors said crypto businesses are scrutinized like financial institutions. This is one of the first criminal cases against ZM Quant for such activities.