Founder of crypto hedge fund Gotbit, Aleksei Andriunin, has been sentenced to eight months in prison for manipulating trading activity in digital tokens.
Sentencing and Charges
Aleksei Andriunin was sentenced on Thursday to eight months in prison, which corresponds to the time he has already served following his arrest in Portugal last October. He was extradited to the United States in February. The ruling was handed down by U.S. District Judge Angel Kelley. Federal prosecutors had requested a 15-month sentence, arguing that Andriunin's company systematically faked trading volume for clients to inflate the visibility of their tokens.
Trading Activity Manipulation
Andriunin and his firm Gotbit were involved in a practice known as 'wash trading', which created a false appearance of active markets. From 2018 to 2024, this tactic was used to manipulate token prices and help clients get listed on larger exchanges. As Andriunin stated in a 2019 interview, he developed code that automated such trading activities.
Operation Token Mirrors and Consequences
The case against Andriunin is part of a broader federal operation called 'Token Mirrors', during which the FBI created its own digital token to expose fraudulent behavior in the crypto markets. Andriunin and Gotbit were part of an investigation that led to 15 individuals and three firms being charged. As part of a separate plea agreement, Gotbit will forfeit $23 million in cryptocurrency, and Andriunin now faces deportation.
Aleksei Andriunin's sentencing serves as a reminder of the need for compliance in cryptocurrency activities and the consequences of market manipulation.
