OP 01 November, 2024 - 10:08 PM
Russian Citizen Accused of Manipulating Crypto Market: Details of Multi-Million Dollar
In Boston, federal authorities have charged a Russian man living in Portugal with a major cryptocurrency market manipulation scheme. Alexey Andriounin, 26, the founder and CEO of Gotbit, was charged with wire fraud and conspiracy to commit market manipulation. In addition, Gotbit and two of its directors, Fedor Kedrov and Kavi Djalili, were also charged.
What happened?
According to investigators, Gotbit, a well-known market maker in the crypto industry, offered to manipulate cryptocurrency trading volume on demand from 2018 to 2024. These actions created the appearance of high demand for certain cryptocurrencies by artificially inflating trading volumes in order to attract attention to these assets on popular sites like CoinMarketCap and achieve listing on major crypto exchanges.
The manipulation scheme and its scale
Investigators allege that Gotbit and its employees, including Jalili (the sales director) and Kedrov (the market making director), offered clients services to artificially increase trading volumes. Andriounin developed special code for so-called “wash trading” and used multiple accounts to evade detection on the blockchain.
Andriounin allegedly kept records, recording the difference between the “Created Volume” from wash trades and the natural “Market Volume”. Gotbit’s clients included Saitama and Robo Inu, whose management is also under investigation. The revenue from such services is believed to have reached tens of millions of dollars, some of which Andriounin transferred to his personal account on Binance.
Criminal consequences
According to the charges, Andriounin and his associates face up to 20 years in prison for wire fraud and up to five years for conspiracy to commit market manipulation. In addition to prison time, they may be required to pay fines, as well as undergo forfeiture and restitution procedures.
Commentary from the prosecutor's office and the FBI
Acting U.S. Attorney Joshua S. Levy and FBI Special Agent in Charge Jody Cohen emphasized that the indictment was part of a larger effort to combat financial crimes and cyber fraud.
Important note: All charges are currently only allegations. The defendants are presumed innocent until proven guilty in court.
According to the investigation, Gotbit worked with clients all over the world, providing manipulation services not only in the United States, but also for international crypto projects.
The defendants claim that such manipulations can be considered part of "market making", but U.S. law enforcement agencies categorically disagree with this position and consider Gotbit's actions a serious financial crime.
In Boston, federal authorities have charged a Russian man living in Portugal with a major cryptocurrency market manipulation scheme. Alexey Andriounin, 26, the founder and CEO of Gotbit, was charged with wire fraud and conspiracy to commit market manipulation. In addition, Gotbit and two of its directors, Fedor Kedrov and Kavi Djalili, were also charged.
What happened?
According to investigators, Gotbit, a well-known market maker in the crypto industry, offered to manipulate cryptocurrency trading volume on demand from 2018 to 2024. These actions created the appearance of high demand for certain cryptocurrencies by artificially inflating trading volumes in order to attract attention to these assets on popular sites like CoinMarketCap and achieve listing on major crypto exchanges.
The manipulation scheme and its scale
Investigators allege that Gotbit and its employees, including Jalili (the sales director) and Kedrov (the market making director), offered clients services to artificially increase trading volumes. Andriounin developed special code for so-called “wash trading” and used multiple accounts to evade detection on the blockchain.
Andriounin allegedly kept records, recording the difference between the “Created Volume” from wash trades and the natural “Market Volume”. Gotbit’s clients included Saitama and Robo Inu, whose management is also under investigation. The revenue from such services is believed to have reached tens of millions of dollars, some of which Andriounin transferred to his personal account on Binance.
Criminal consequences
According to the charges, Andriounin and his associates face up to 20 years in prison for wire fraud and up to five years for conspiracy to commit market manipulation. In addition to prison time, they may be required to pay fines, as well as undergo forfeiture and restitution procedures.
Commentary from the prosecutor's office and the FBI
Acting U.S. Attorney Joshua S. Levy and FBI Special Agent in Charge Jody Cohen emphasized that the indictment was part of a larger effort to combat financial crimes and cyber fraud.
Important note: All charges are currently only allegations. The defendants are presumed innocent until proven guilty in court.
According to the investigation, Gotbit worked with clients all over the world, providing manipulation services not only in the United States, but also for international crypto projects.
The defendants claim that such manipulations can be considered part of "market making", but U.S. law enforcement agencies categorically disagree with this position and consider Gotbit's actions a serious financial crime.
