Fishing enforcement? FBI sets up a scam to issue coins, accusing multiple market makers of manipulating the market

Original title: FBI Issues Tokens to Trap and Charge Crypto Companies for「Price Manipulation」

Original source: Coin68

US officials have sued four cryptocurrency companies, accusing them of manipulating the market and hyping a token created by the FBI.

The FBI issued tokens to set up a trap and then sued crypto companies that specialize in "hype"

The U.S. Department of Justice sued four cryptocurrency companies Gotbit, ZM Quant, CLS Global and MyTrade, as well as 18 executives of these companies on October 9, accusing them of manipulating the market and hyping cryptocurrency tokens.

US prosecutors said the four defendant companies established cryptocurrency projects but provided false information and conducted wash trading to create the illusion that these projects were active and in high demand. After the token price rose to a certain level, the defendants began to ship and arbitrage.

All four companies admitted their crimes and forfeited $25 million worth of crypto assets.

Meanwhile, Gotbit, ZM Quant, CLS Global and MyTrade were market makers hired to conduct wash trading for these tokens.

It is worth noting that in order to investigate the case, the FBI created a token called "NexFundAI" as a "bait", then hired market makers to establish the market and eventually collected evidence of the crime.

According to DEXTools, the NexFundAI token was issued at the end of May 2024, and the price rose sharply in the next few days, and then remained unchanged for a long time until it fell sharply at the end of August, and has now stopped trading.

NexFundAI token price chart, screenshot from DEXTools at 10:55 am on October 10, 2024

The U.S. Department of Justice said this is the first time that U.S. authorities have prosecuted financial crimes in the cryptocurrency industry. This is seen as a reflection of the U.S. authorities' increased crackdown after cryptocurrency scams in 2023 caused Americans to lose $5.6 billion. Previously, U.S. authorities also fined Binance $4.3 billion for suspected money laundering.

The incident also sparked controversy in the crypto community on X (Twitter), with most people surprised by the FBI's setting up of a bureau to catch criminals. Now everyone must act with caution to avoid "falling into the government's trap" when interacting with meme tokens of unknown origin.

However, in the past few hours, a large number of meme tokens with names similar to NexFundAI have been created and actively traded.

Tokens named NexFundAI are being traded, screenshot from DEXTools on the morning of October 10, 2024

Blockchain analyst @jconorgrogan also discovered the FBI's crypto wallet.

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