CLS Global, a UAE-based crypto financial services provider, has confessed to market manipulation involving the NextFundAI (NEXF) token.
CLS Global involvement in wash trading scheme
CLS Global participated in wash trading, buying and selling assets simultaneously to create fake market activity. Such actions are illegal in many countries. As part of the plea deal, the firm agreed to pay a fine of $428,059 and forfeit its funds on major crypto exchanges like Binance and KuCoin.
FBI's operation against crypto fraud
The NEXF token was created as part of the FBI's operation to uncover bad actors involved in pump-and-dump schemes. This is the first instance of the FBI creating a fake token to expose market manipulators. After the token's launch, the FBI contacted crypto industry players claiming to provide essential services for new projects.
Consequences and future actions
CLS Global also agreed to halt services in the United States and was placed on a 3-year probation. Last year, the SEC filed civil charges against the company for securities law violations. These efforts are part of a larger operation, revealing charges against 18 individuals.
The CLS Global case highlights the regulatory bodies' determination to combat crypto market fraud and the importance of compliance for participants.
