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Crime and Investigations

FBI Sting Uncovers Crypto Fraud: UAE Firm Pleads Guilty to Market Manipulation

FBI Sting Uncovers Crypto Fraud: UAE Firm Pleads Guilty to Market Manipulation

A UAE-based cryptocurrency firm, CLS Global, has admitted to charges of market manipulation and wire fraud in a groundbreaking FBI sting operation.

The case centers around NexFundAI (NEXF), a digital token created by the FBI to bait fraudulent actors in the crypto industry.

NexFundAI was designed to mimic typical pump-and-dump schemes, attracting those looking to manipulate trading volumes to deceive investors. CLS Global, under the guise of providing market-making services, engaged in wash trading to artificially inflate NEXF’s activity, boosting its perceived popularity. The firm’s involvement was uncovered when the FBI, posing as scammers, enlisted CLS to facilitate the scheme.


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Under a plea deal, CLS Global has agreed to pay a $428,059 fine and forfeit funds held in Binance and KuCoin accounts. Additionally, the company will be barred from participating in U.S.-accessible crypto trading platforms for three years, during which it must comply with SEC oversight and certification requirements.

This sting operation represents the first time the FBI has created a fake crypto token to expose fraudulent activities. It is part of a larger investigation involving 18 individuals and another company, MyTrade MM, accused of aiding similar schemes.

The case highlights growing efforts by U.S. authorities to clamp down on crypto fraud using innovative and proactive strategies to protect investors in the burgeoning digital asset market.

Author
Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.

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