Three market makers in the cryptocurrency industry, along with related individuals, are facing charges of fraud and market manipulation brought forth by the U.S. Securities and Exchange Commission (SEC) in civil lawsuits filed in the District Court of Massachusetts. The investigation also involved the Department of Justice and the Federal Bureau of Investigation (FBI).
The SEC filed lawsuits on October 9 against Gotbit Consulting, ZM Quant Investment, and CLS Global. Additionally, lawsuits were filed against individuals connected to these companies. A total of nine individuals were charged, as reported by the SEC.
Gotbit Consulting and its marketing director Fedor Kedrov are accused of market manipulation through wash trading on behalf of individuals promoting cryptocurrencies Saitama and Robo Inu. Wash trading involves self-dealing to create the illusion of market interest. Vy Pham, who organized these crypto projects, faces charges of unregistered securities offerings, fraud in the sale of securities, and market manipulation.
The companies ZM Quant Investment and CLS Global are facing similar charges related to the cryptocurrency NexFundAI. This coin was created by the FBI. Additionally, ZM Quant and four individuals connected to Pham were charged in relation to another crypto asset called SaitaRealty coin.
Kedrov is believed to reside in Russia, while the ZM Quant executives mentioned in the lawsuit live in London, England, and Hong Kong. One of the individuals charged in the fifth indictment is based in India. The complaints seek various penalties against the defendants, including permanent injunctions, disgorgement of gains, and civil penalties.
The FBI mentioned that they are investigating more cryptocurrencies in addition to Saitama, SaitaRealty, SaitaChain, Robo Inu, VZZN, Lillian Finance, and NexFundAI. The Ministry of Justice listed a total of 18 individuals and entities facing charges, including the company MyTrade MM, which provided services to NexFundAI.
The founders of VZZN and Lillian Finance have also been charged, with the founder of VZZN having connections to Saitama. These coins seem to have limited connection to the rest of the ongoing investigation.
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