TheDepartmentofJusticehasindictedAlekseiAndriunin,founderandCEOofcryptofinancialservicesfirmGotbit,onchargesofwirefraudandconspiracytocommitmarketmanipulation.
Andriunin,aRussiannationalresidinginPortugal,allegedlyorchestratedaschemetoartificiallyinflatetradingvolumesforclientcryptocompanies,includingseveralbasedintheUS.HewasarrestedonOct.16.
Theindictment,filedintheDistrictofMassachusetts,alsochargesGotbitandtwoofitsdirectors,QawiJaliliandFedorKedrov,whowerenamedinapreviousindictmentunsealedearlierthismonth.
ProsecutorsallegethatGotbit,whichmarketeditselfasa“memecoinmarketmaker,”used“washtrading”techniquesfrom2018through2024tomanipulatemarketactivity,enablingcryptocurrenciestosecurelistingsonplatformslikeCoinMarketCapandmajorexchanges.
Memecoins,oftenbasedoninternetmemes,canquicklyriseinvaluebuttendtoexperiencesharpdeclines,atrendthatGotbitallegedlyexploitedtoattractnewclients.
CourtdocumentsclaimthatAndriunindevelopedsoftwarespecificallydesignedtocarryoutwashtrades,creatingmisleadingtradingactivitytodeceiveinvestorsandexchanges.TheindictmentalsoallegesthatGotbit’semployeesmarketedtheseservicestoclients,highlightingtheirmethodsforevadingdetectiononpublicblockchains.
Gotbitreportedlyfacilitatedmillionsofdollarsinwashtradesandearnedtensofmillionsfromthesepractices,withAndriuninallegedlytransferringsignificantsumsintohispersonalBinanceaccount.
ThechargesalsohighlightGotbit’sroleintargetingmemecoininvestorsthroughwhatprosecutorsdescribeas“pumpanddump”schemes.Theseschemesinvolvedinflatingatoken’stradingvolumetodrawininvestorsbeforesellingoffholdingsataprofit,oftenleavinginvestorsataloss.
ProsecutorscitedOperationTokenMirrors,aDOJinvestigationthatinvolvedcreatingafakedigitaltokentoobservemanipulationtactics,aspartoftheevidencegatheredinthecase.
Ifconvicted,Andriunincouldfaceupto20yearsinprisonforwirefraud,inadditiontofines,restitution,andforfeiture.Theconspiracychargecarriesamaximumsentenceoffiveyears.SentencingwouldbedeterminedbyafederaljudgebasedontheU.S.SentencingGuidelines.
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