Cryptocurrency firm founder pleads guilty to fraud after novel FBI probe
Adds comment from defense lawyer, further details on plea deal in paragraphs 5-6
By Nate Raymond
BOSTON, Oct 30 (Reuters) -The founder of a cryptocurrency financial services firm pleaded guilty on Wednesday to engaging in a scheme to manipulate the market for digital tokens, including one created at the FBI's behest to help ferret out fraud in the crypto sector.
Liu Zhou, the self-described "mastermind" behind cryptocurrency firm MyTrade, pleaded guilty in Boston federal court to conspiring to commit market manipulation and wire fraud, just three weeks after authorities announced charges against him, 14 other people and three companies following a novel investigation into the crypto sector.
The probe, dubbed "Operation Token Mirrors," marked the first time the FBI directed the creation of its own digital token, as well as a fake cryptocurrency company to help bait and catch fraudsters in the market.
Prosecutors said MyTrade was one of three so-called market makers that offered illicit trading services to cryptocurrency companies and, during the sting operation, agreed to help manipulate the market for FBI-backed NexFundAI's token, which operated on the Ethereum blockchain.
As part of a plea deal, Zhou, 39, agreed to not appeal any prison sentence of 1-1/2 years or less. MyTrade, which remains in operation, was also required to cease providing services that had previously enabled millions of dollars worth of daily sham trades for about 60 cryptocurrencies, prosecutors said.
"Notwithstanding the charges to which Mr. Zhou is seeking to speedily resolve, he has always endeavored to offer lawful services that are in compliance with any governing regulations," Jason Benzaken, his lawyer, said in a statement.
Zhou, who lives in China and Canada, in 2021 founded MyTrade, a British Virgin Islands-registered firm that offered trading-related services to dozens of cryptocurrency companies, including "volume support," in which bots could be used to manipulate the trading volume of their tokens.
Prosecutors in court papers called that a form of "wash trading," a type of sham trading designed to artificially inflate an asset's trading volume or price.
During virtual and in-person meetings in September with purported NexFundAI promoters, Zhou discussed how MyTrade's bots could be used for purposes including "pump and dumps", and discussed a plan to manipulate the market for its token.
The FBI approached Zhou following the last of those meetings on Sept. 23 and within a week he had agreed to plead guilty, prosecutors said. Four other people caught up in the investigation likewise have pleaded guilty.
Reporting by Nate Raymond in Boston, Editing by Alexia Garamfalvi, David Holmes and Jamie Freed
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
