FBI Targets Crypto Wash Trading, Charges 10 Tied to Market-Making Firms
U.S. authorities have charged 10 individuals connected to several crypto market-making firms as part of a broad crackdown on alleged wash trading, following a multi-year undercover investigation by the FBI and IRS.
According to prosecutors, agents created fake cryptocurrencies as bait to approach market makers and document alleged offers to artificially boost trading volumes and token prices. Investigators say the defendants coordinated trades across multiple wallets to simulate genuine demand, including purported fake volume generation, price manipulation, and pump-and-dump activity. Prosecutors said such conduct can distort liquidity signals and mislead investors about real market interest.
Firms cited by authorities include Gotbit, Vortex, Antier, and Contrarian, among others. Some defendants have already pleaded guilty. Gotbit founder Aleksei Andriunin agreed to a prison term of no more than 24 months after forfeiting $23 million. Other defendants could face penalties of up to 20 years in prison.
Investigators said the probe indicates wash trading may be more widespread than previously understood, describing it as systemic rather than isolated.
Wash trading typically involves the same party buying and selling an asset between controlled accounts to manufacture activity. The practice can inflate reported volume, lift token prices, and make projects appear more liquid than they are. Authorities say the risk is heightened in crypto markets due to global venues, uneven regulation, and the industry's heavy reliance on liquidity metrics. Regulators have warned that a meaningful share of trading volume—especially in smaller tokens—may be artificially inflated.
Related: FBI Warns Tron Users of Fake 'FBI Token' Airdrop Scam
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