In the U.S., criminal charges have been filed for the first time for fraud and manipulation in cryptocurrency markets. The scandal involves both leaders of crypto companies and financial services firms "market makers" involved in illegal trading schemes.

Details of the Investigation

Operation "Token Mirrors", conducted by the FBI, uncovered "wash trading" practices — illegal transactions intended to artificially inflate trading volumes and manipulate token prices. Charged are leaders of the Saitama cryptocurrency company and market makers like ZM Quant, CLS Global, MyTrade, and Gotbit, using "pump and dump" schemes. The investigation has already seized over $25 million in cryptocurrency and deactivated numerous trading bots.

A New Twist on Old Schemes

Acting U.S. Attorney Joshua Levy noted that despite the innovative nature of cryptocurrencies, fraudulent schemes such as "pump and dump" and "wash trading" are not new. The operation showcases regulators' commitment to protecting investors from these schemes even in the crypto world.

Regulatory Fallout

In addition to criminal charges, the U.S. Securities and Exchange Commission (SEC) has filed civil complaints against Saitama, Gotbit, CLS, and ZM Quant for violating securities laws. This case underscores the need for thorough research by investors before entering the volatile world of cryptocurrency.

This major crackdown marks a significant event in crypto regulation, asserting that fraudulent activities will not go unchecked. The case is likely to have lasting impacts on the industry, prompting participants to be more vigilant and informed.