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NexFundAI, the FBI's Ethereum-based token, was used to investigate price manipulation in cryptocurrency markets.
The FBI created a cryptocurrency as part of an investigation into price manipulation in cryptocurrency markets, the government said Wednesday. The Ethereum-based token NexFundAI was created by the FBI with the help of “cooperating witnesses.”
As a result of the investigation, the Securities and Exchange Commission charged three “market makers” and nine people for allegedly participating in schemes to boost the prices of certain crypto assets. The Department of Justice charged 18 individuals and organizations for “widespread fraud and manipulation” in the cryptocurrency markets.
The accused allegedly made false statements about their tokens and conducted so-called «fishing deals» to create an impression of an active commercial market, prosecutors say. Three market makers - ZMQuant, CLS Global and MyTrade - allegedly made deals or conspired to make trades on behalf of NexFundAI, an Ethereum-based token they did not know was created by the FBI.
What the FBI has discovered in this case is essentially a new twist to old-fashioned financial crimes,» says Jody Cohen, special agent leading the FBI’s Boston unit. «What we found led to accusations against the leadership of four cryptocurrency companies, as well as four cryptocurrency «market makers» and their employees who are accused of leading a complex trading scheme that allegedly stole millions of dollars from honest investors».
Liu Zhou, a «market maker» working with MyTrade MM, allegedly told the promoters of NexFundAI that MyTrade MM is better than its competitors because they control "pump-and-dump" («pumping and dumping»), allowing them to «easily conduct internal trading».
FBI representative told CoinDesk that trading activity on the coin was limited, but did not share any additional information. On Wednesday, Joshua Levi, the acting US district attorney for Massachusetts, said that token trading was disabled, CoinDesk reports.
It is reported that the US Justice Department has obtained a $25 million allocation from «fraudulent profits» which will be returned to investors.
source :
The FBI created a cryptocurrency as part of an investigation into price manipulation in cryptocurrency markets, the government said Wednesday. The Ethereum-based token NexFundAI was created by the FBI with the help of “cooperating witnesses.”
As a result of the investigation, the Securities and Exchange Commission charged three “market makers” and nine people for allegedly participating in schemes to boost the prices of certain crypto assets. The Department of Justice charged 18 individuals and organizations for “widespread fraud and manipulation” in the cryptocurrency markets.
The accused allegedly made false statements about their tokens and conducted so-called «fishing deals» to create an impression of an active commercial market, prosecutors say. Three market makers - ZMQuant, CLS Global and MyTrade - allegedly made deals or conspired to make trades on behalf of NexFundAI, an Ethereum-based token they did not know was created by the FBI.
What the FBI has discovered in this case is essentially a new twist to old-fashioned financial crimes,» says Jody Cohen, special agent leading the FBI’s Boston unit. «What we found led to accusations against the leadership of four cryptocurrency companies, as well as four cryptocurrency «market makers» and their employees who are accused of leading a complex trading scheme that allegedly stole millions of dollars from honest investors».
Liu Zhou, a «market maker» working with MyTrade MM, allegedly told the promoters of NexFundAI that MyTrade MM is better than its competitors because they control "pump-and-dump" («pumping and dumping»), allowing them to «easily conduct internal trading».
FBI representative told CoinDesk that trading activity on the coin was limited, but did not share any additional information. On Wednesday, Joshua Levi, the acting US district attorney for Massachusetts, said that token trading was disabled, CoinDesk reports.
It is reported that the US Justice Department has obtained a $25 million allocation from «fraudulent profits» which will be returned to investors.
source :
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www.sec.gov
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www.coindesk.com
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www.theverge.com