The founder of a cryptocurrency financial services firm pleaded guilty to U.S. charges involving a scheme to manipulate the market for digital tokens on behalf of client companies.
Aleksei Andriunin, the founder and CEO of the cryptocurrency market maker Gotbit, and his company entered guilty pleas in federal court to charges of conspiracy to commit market manipulation and wire fraud.
The pleas came shortly after Andriunin, 26, was arrested in October as part of a broader investigation into the crypto sector.
They were among 15 individuals and three firms involved in "Operation Token Mirrors," a novel investigation in which the FBI created its own digital token to help catch fraudsters in the crypto market.
Prosecutors have agreed to recommend a sentence of up to two years in prison for Andriunin when he is sentenced on June 16, while Gotbit is set to forfeit approximately $23 million in cryptocurrency.
From 2018 to 2024, Gotbit engaged in "wash trading," a dubious trading practice, and market manipulation on behalf of several cryptocurrency clients to artificially inflate trading volumes for their tokens.
Prosecutors referenced a 2019 interview in which Andriunin discussed developing a code to execute wash trades, thereby artificially boosting trading volume to secure listings on larger cryptocurrency exchanges.
Gotbit reportedly conducted wash trades worth millions of dollars and earned tens of millions of dollars for its services related to cryptocurrencies such as Saitama and Robo Inu. Individuals associated with these cryptocurrencies have also been charged.