In a high-profile development, Gotbit’s CEO Alexey Andryunin has been arrested in Portugal following an FBI request, with extradition to the U.S. in progress. This arrest represents a crucial step in the fight against fraud within the crypto industry.
🐹 Gotbit Hedge Fund, which operates as the official market maker for Hamster Kombat’s $HMSTR token, now finds itself in the spotlight. Investor concerns are mounting as the token's value dropped by 12% in the past 24 hours.
The U.S. Department of Justice has indicted 16 firms and multiple individuals in connection with a large-scale crypto fraud investigation. Companies such as Gotbit, ZM Quant, and CLS Global have been linked to this scandal. As part of the probe, authorities have arrested four individuals, secured six plea deals, and seized over $30 million in digital assets.
Here’s how the operation unfolded:
The FBI set up an undercover initiative by launching their own cryptocurrency, NexFundAI, on the Ethereum blockchain. This allowed them to engage with market makers (MMs) while posing as clients. During these interactions, MM staff revealed the strategies they use to inflate trading volumes, create fake wallets, and manipulate token prices.
The fraudulent practices, identified by the FBI as “wash trading” and other forms of artificial market activity, have resulted in serious criminal charges. If found guilty, the individuals involved could face up to 25 years in prison.
This case highlights the inherent risks within the crypto world and serves as a stark reminder of the severe consequences of participating in fraudulent schemes. Be vigilant and stay informed while navigating the unpredictable crypto landscape.
$HMSTR
HMSTR
0.004121
+3.33%
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