The DOJ has indicted Gotbit CEO Aleksei Andriunin for wire fraud and market manipulation, alleging he inflated cryptocurrency visibility through fake trading.
On Thursday, the U.S. Department of Justice (DOJ) said that Aleksei Andriunin, the founder and CEO of the cryptocurrency financial services company Gotbit, has been charged with wire fraud, plot to commit market manipulation and wire fraud, and wire fraud. It says in the announcement:
A Russian national residing in Portugal has been indicted for his role in a wide-ranging conspiracy to manipulate cryptocurrency markets on behalf of client cryptocurrency companies.
Crypto Market Manipulation Crackdown
The indictment says that Andriunin planned a large-scale scam to manipulate the market through Gotbit, a company in the crypto industry that is known as a “market maker” to create fake trading volume and make some cryptocurrencies seem more popular than they really were.
Prosecutors say that Andriunin and Gotbit used a method called “wash trading,” which involves making fake trades to make it look like the market is busy. Court papers say that this strategy helped Gotbit’s clients, including U.S. companies, get listed on sites like Coinmarketcap and get into bigger cryptocurrency exchanges.
The DOJ detailed:
Gotbit provided market manipulation services to create artificial trading volume for multiple cryptocurrency companies, including companies located in the United States.
Andriunin reportedly kept records that compared this “Created Volume” from wash trades to real market volume. He then sold these fake services to people who were looking to trade, saying that they would make them more visible and help them do better.
Along with Andriunin, Fedor Kedrov and Qawi Jalili, both heads of Gotbit, were also linked to the alleged scheme. Andriunin could get harsh punishments if he is found guilty.
The Justice Department said that someone charged with wire fraud could face up to 20 years in jail, up to three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss from the crime, as well as having to pay back money that was stolen and forfeit it. “You can get up to five years in prison for conspiracy to commit market manipulation and wire fraud. You can also get up to three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss from the offense, restitution, and forfeiture.”
