SEC Cracks Down on Crypto Firms

The SEC, DOJ, and FBI filed lawsuits in the District Court of Massachusetts targeting three crypto firms: ZM Quant Investment, Gotbit Consulting, and CLS Global.

These actions form part of a more extensive investigation involving the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI).

Accusations Against Gotbit and Kedrov

Gotbit Consulting and its marketing director, Fedor Kedrov, are at the center of the SEC's accusations. They allegedly engaged in market manipulation via wash trading.

This was reportedly done by individuals promoting digital assets such as Robo Inu and Saitama. The SEC's charges aim to highlight the misuse of innovative technology in age-old fraudulent schemes like pump and dump.

The Role of Vy Pham in the Scheme

Vy Pham, a Vietnamese citizen residing in California, is named as the organizer of specific crypto projects. Pham faces separate charges, including unregistered securities offerings, fraud, and market manipulation. Additionally, the SEC has sued four individuals associated with Pham, further broadening the scope of this legal action.

ZM Quant and CLS Global Under Scrutiny

Apart from Gotbit Consulting, the SEC has charged two more firms, ZM Quant Investment, and CLS Global, in connection with a cryptocurrency named NexFundAI, which the FBI created.

ZM Quant is also implicated alongside four other individuals in dealings involving the SaitaRealty coin. The executives from ZM Quant are reportedly located in Russia, England, and Hong Kong, adding an international dimension to the SEC's efforts.

"Wash trading has long been outlawed in the financial markets, and cryptocurrency is no exception," stated Acting United States Attorney Joshua Levy.

The Department of Justice charged eighteen individuals and entities with wire fraud and manipulating crypto markets. During the crackdown, the DOJ seized $25 million in cryptocurrency tied to wash trading activities.