U.S. Department of Justice Charges 10 at Four Crypto Market Makers Over Alleged Wash Trading
According to the U.S. Department of Justice, the case stems from an FBI and IRS-CI undercover operation alleging wash trading and pump-and-dump schemes involving four crypto market-making firms.
The U.S. Department of Justice said 10 senior staff and employees tied to four crypto market-making firms—Gotbit, Vortex, Antier and Contrarian—were charged with market manipulation and conspiracy to commit wire fraud over alleged wash trading and pump-and-dump schemes. According to the DOJ, the charges were announced in a March 31 press release and stem from an undercover FBI and IRS-CI operation that began in May 2024, in which the FBI created crypto tokens to investigate whether firms would artificially inflate trading volume and prices. Prosecutors said three defendants were arrested in Singapore and extradited to the United States, where they appeared before a federal judge in Oakland on Monday, and that two co-defendants had already pleaded guilty and been sentenced. Authorities also said they had seized more than $1 million in cryptocurrency.
- Wash trading: A form of market manipulation in which the same party effectively trades with itself to create misleading volume and apparent market activity.
- Pump-and-dump: A scheme in which participants artificially raise an asset’s price or interest and then sell at inflated levels, leaving other investors exposed to losses.
- Market maker: A trading firm or participant that provides liquidity by quoting buy and sell prices, though prosecutors allege some firms abused that role in this case.