The FBI created its cryptocurrency, “NexFundAI,” as part of an undercover operation to catch crypto market manipulators. An unsealed indictment charged 18 individuals and several firms with artificially inflating token prices through sham trades.
An covert operation is common for the U.S. Federal Bureau of Investigation (FBI). Nevertheless, this would be the bureau’s inaugural attempt to develop its crypto token to pursue justice.
On Wednesday, an unsealed indictment accused Gotbit, CLS Global, MyTrade, ZM Quant, and 18 individuals of artificially inflating the price of tokens by conducting sham transactions in exchange for payment.
One of those tokens was ‘NexFundAI,’ an Ethereum-based cryptocurrency developed by the FBI to apprehend crypto market manipulators. Jodi Cohen, the Special Agent of the FBI’s Boston Field Office, characterized it as an “unprecedented step.”
The NexFundAI token is currently trading at a market capitalization of $177,000, as per DEXScreener. $3.5 million has been the trading volume for the token over the past 24 hours, representing a 5,000% increase.
“This investigation, which was the first of its kind, identified many fraudsters in the cryptocurrency industry.” “Wash trading has been prohibited in the financial markets for an extended period, and cryptocurrency is no exception,” stated Acting United States Attorney Joshua Levy.
The FBI is encouraging individuals affected by the trading of tokens associated with the fraud to contact them. The agency has included its own token in a list of coins that include Saitama, Robo Inn, VZZN, and Lillian Finance.
Gotbit Consulting, ZM Quant Investment, and CLS Global were also sued by the U.S. Securities and Exchange Commission (SEC).
Onchain activity indicates that FBI-linked wallets have recently executed numerous memecoin transactions, as per Coinbase director Conor Grogan.
“It is uncertain whether the FBI knew this, but they doxxed their wallets.” The wallet that seeded the FBI wallet deployed capital to multiple other wallets shortly after deployment, resulting in dozens of transactions. Grogan stated on X, “From what I can tell, FBI wallets possess at least 75% of the token supply.”
Grogan discovered that wallets affiliated with the FBI possess coins such as Pornrocket, EthereumMAX, and BONE. It is uncertain whether other users transferred those coins to the FBI’s linked wallet addresses.
