The US Department of Justice has obtained a guilty plea from the operator of MyTrade, a crypto market maker, as part of a broader investigation into market manipulation. Liu Zhou, a 39-year-old individual with ties to China and Canada, will face sentencing next year for engaging in wash trading of client cryptocurrencies across multiple exchanges. This practice involves artificially inflating asset prices by creating the illusion of high transaction interest.
According to federal charges, other firms such as Gotbit, CLS Global, and ZM Quant also allegedly engaged in wash trading to create the appearance of legitimate activity, selling tokens at inflated prices to unsuspecting buyers. The Justice Department claims that MyTrade's operation, known as MyTrade MM, admitted to self-trading and using a volume bot to manipulate prices. The firm allegedly targeted unsuspecting buyers in the community to turn a profit.
Meanwhile, CLS Global has stated its intention to cooperate with US authorities, acknowledging the need to improve its processes and engage in constructive dialogue with regulatory bodies.