Crypto ‘Market Maker’ Gotbit Founder Faces Wire Fraud Charges

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Sujha Sundararajan

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Sujha Sundararajan

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Last updated:

November 1, 2024 00:18 EDT

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The US Department of Justice (DOJ) indicted the founder of crypto firm Gotbit over market manipulation and wire fraud.

Aleksei Andriunin, a Russian national, was involved in “a wide-ranging conspiracy” to manipulate crypto markets on behalf of client companies. Between 2018 and 2024, Gotbit provided market manipulation services to create artificial trading volume for various crypto firms.

The superseding indictment also charged Gotbit and two of its directors, Fedor Kedrov and Qawi Jalili, who already face crypto “wash trading” charges.

Andriunin purportedly kept records of Gotbit’s market manipulation, the DOJ release said. He had records of spreadsheets that compared “Created Volume” from wash trades with naturally occurring “Market Volume.”

Further, Andriunin and the firm’s directors marketed wash trading tactics to prospective clients. They also explained how Gotbit used multiple accounts to avoid being detected for wash trades on the public blockchain.

“Gotbit allegedly made wash trades worth millions of dollars on behalf of clients and received tens of millions of dollars in proceeds for these fraudulent services.”

Additionally, Gotbit’s clients included meme coins Saitama and Robo Inu, which have been charged separately in a pump-and-dump scheme.

Andriunin had transferred Gotbit’s proceeds worth millions of dollars into his personal Binance account, the DOJ noted.

Gotbit and Others Involved in Widespread Crypto Market Manipulation Fraud

In October, federal prosecutors charged three crypto companies including Gotbit, ZM Quant, CLS Global, and 15 individuals with “widespread” market manipulation fraud.

This crackdown resulted in four arrests and five plea agreements. Authorities also seized cryptocurrency worth over $25 million.

Andriunin was booked with charges on October 9, for his alleged involvement in the fraud.

“These are cases where an innovative technology – cryptocurrency – met a century old scheme – the pump and dump. The message today is, if you make false statements to trick investors, that’s fraud,” said Acting US Attorney Joshua Levy.

The current charges by the DOJ for wire charges would result in 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.

However, for market manipulation charges, the jail term is five years.