As a seasoned researcher with over two decades of experience in financial markets and digital assets, I find the recent charges against Gotbit, ZM Quant, and other crypto projects quite intriguing. It seems that these entities have been engaging in manipulative activities to artificially inflate token prices, which is not only unethical but also illegal.
On Wednesday, federal authorities accused two alleged trading platform operators, several cryptocurrency initiatives, and more than a dozen people of artificially influencing various cryptocurrency markets. They claimed that these individuals made profits through transaction fees and by selling manipulated coins at higher-than-normal prices.
As revealed in documents made public on Wednesday, Gotbit and ZM Quant allegedly manipulated the trading of several tokens to give an illusion of greater legitimate activity than they truly possessed. They reportedly sold some of these tokens at “excessively high prices” to unsuspecting investors, promoted these coins across various platforms, and successfully persuaded exchanges to grant them lower transaction fees when purchasing tokens.
Authorities argue that both Gotbit and ZM Quant publicly presented themselves as legitimate market-makers providing legal services, yet, in private dealings, they allegedly offered clients illicit services such as wash trading.
In the case of Gotbit, their allegedly illegal activities weren’t particularly secret: in 2019, Alexey Andryunin, a co-founder of Gotbit and a college sophomore at the time, openly detailed to CoinDesk how he provided wash trading services to his clients. He was straightforward about the dubious nature of his venture, acknowledging that Gotbit did not have any official registration because it was “not entirely ethical.
ZMQuant is a company registered in the British Virgin Islands, yet the individuals implicated in its indictment reside in Hong Kong. On the other hand, while Gotbit doesn’t appear to have any official registration, it is speculated that its workforce hails from Russia.
The list contained manipulated digital assets such as Robo Inu, which experienced a surge following the unveiling of the indictment. Other entities mentioned in the indictment are VZZN, NextFundAI, and Saitama. As per the charges, each token, including Robo Inu, is categorized as a security. Notably, individuals associated with these projects, among them the founder of Robo Inu, Vy Pham, have also been implicated in the case.
On Wednesday afternoon, the U.S. Securities and Exchange Commission (SEC) announced simultaneous civil lawsuits against the company Gotbit and its Russian-resident director, Fedor Kedrov, alleging violations of securities laws.
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2024-10-09 22:58