The US Justice Department has indicted a Russian national for allegedly running a crypto firm that manipulated markets and defrauded clients.
Crypto Firm Accused of Inflating Trading Volumes
Aleksei Andriunin, the founder and CEO of Gotbit, is accused of running a scheme that artificially boosted trading volumes for crypto projects. Gotbit, which acted as a market maker, allegedly used a technique called “wash trading” to make it seem like there was more interest in certain cryptocurrencies than there actually was.
How the Scheme Worked
Gotbit allegedly used computer code to buy and sell crypto assets simultaneously, often at inflated prices. This gave the impression of high demand and market activity, which helped the crypto projects get listed on popular websites like CoinMarketCap and major crypto exchanges.
Gotbit Marketed its Services to Clients
Andriunin and his associates, Fedor Kedrov and Qawi Jalili, are accused of marketing Gotbit’s illicit tactics to potential clients. They allegedly traded crypto assets on behalf of these clients, receiving tens of millions of dollars in the process.
Andriunin Accused of Moving Funds to Personal Account
Prosecutors believe that Andriunin moved much of Gotbit’s profits to his personal Binance account.
Potential Penalties
If convicted, Andriunin faces up to 20 years in prison for wire fraud and five years for conspiracy to commit market manipulation and wire fraud. He could also be fined, ordered to pay restitution, and have his assets seized.
