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The US Department of Justice (DOJ) has indicted Aleksei Andriunin, Gotbit's founder, for wire fraud and market manipulation. This action is part of a broader crackdown on cryptocurrency market fraud. The indictment also names Gotbit directors Fedor Kedrov and Qawi Jalili. It highlights a scheme to create false trading volumes to manipulate market prices.
From 2018 to 2024, Gotbit allegedly engaged in "wash trading." This practice involves executing trades to inflate market demand without actually exchanging assets. It was purportedly done to attract investments under deceptive pretenses.
Andriunin maintained detailed records of these manipulations, including spreadsheets that contrasted fake volume with genuine market activity. These records are crucial to the DOJ's case. Gotbit’s leaders also marketed these deceptive strategies to potential clients. They explained using multiple accounts to evade detection on public blockchains.
The indictment also connects Gotbit to pump-and-dump schemes involving meme coins like Saitama and Robo Inu. Both coins face separate charges. Illicit proceeds from these activities, amounting to millions, were transferred to Andriunin’s personal accounts, including significant sums moved to his Binance account.
The wire fraud charges could lead to up to 20 years in prison for Andriunin, fines, restitution, and forfeiture of gains. Market manipulation charges carry a potential five-year sentence. These charges underscore a significant shift in how regulatory bodies scrutinize crypto-market practices.
Federal prosecutors charged several individuals and firms in October, leading to arrests and plea deals. They seized over $25 million in cryptocurrencies. Acting US Attorney Joshua Levy stated that using new tech for old fraud would face harsh enforcement.
