Russian CEO's Market Manipulation Services Caught in DOJ's Crypto Crackdown

The DOJ has indicted a Russian cryptocurrency CEO for allegedly orchestrating a vast wash trading scheme to inflate crypto market volumes, misleading investors and exchanges globally.

An Empire of Fake Trades: DOJ Reveals Conspiracy Inside Crypto Markets

The U.S. Department of Justice (DOJ) announced on Thursday that Aleksei Andriunin, the founder and CEO of cryptocurrency financial services firm Gotbit, has been indicted on charges of wire fraud and conspiracy to commit market manipulation and wire fraud. The announcement states:

A Russian national residing in Portugal has been indicted for his role in a wide-ranging conspiracy to manipulate cryptocurrency markets on behalf of client cryptocurrency companies.

The indictment claims that Andriunin orchestrated an extensive market manipulation scheme through Gotbit, a company known as a “market maker” in the crypto industry, to create fake trading volume and inflate the visibility of certain cryptocurrencies.

Prosecutors allege that Andriunin and Gotbit used a technique called wash trading, in which artificial trades are generated to give the impression of active market interest. This tactic, according to court documents, helped Gotbit’s clients, including companies in the U.S., achieve listings on platforms like Coinmarketcap and access to larger cryptocurrency exchanges.

The DOJ detailed:

Gotbit provided market manipulation services to create artificial trading volume for multiple cryptocurrency companies, including companies located in the United States.

Andriunin allegedly maintained records comparing this “Created Volume” from wash trades to actual market volume and marketed these fraudulent services to potential clients, promising to boost their visibility and trading success.

In addition to Andriunin, Gotbit directors Fedor Kedrov and Qawi Jalili were also implicated in the alleged scheme. If convicted, Andriunin could face substantial penalties. “The charge of wire fraud provides for a sentence of up to 20 years in prison, up to three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss from the offense, restitution and forfeiture,” the Justice Department detailed. “The charge of conspiracy to commit market manipulation and wire fraud provides for a sentence of up to five years in prison, up to three years of supervised release, a fine of up to $250,000 to twice the gross gain or loss from the offense, restitution and forfeiture.”