The FBI took a unique approach to combating cryptocurrency fraud by creating its own token, called NexFundAI, as part of an undercover operation aimed at exposing market manipulators.
This Ethereum-based token was used as bait to infiltrate fraudulent schemes involving wash trading and pump-and-dump practices, where token prices were artificially inflated before being sold at a profit.
In this operation, NexFundAI allowed the FBI to track and gather evidence against 18 individuals and companies involved in manipulating multiple cryptocurrencies, including Saitama. One key player in the scheme reportedly earned over $11 million by exploiting price manipulations of Saitama.
The FBI’s sting, dubbed “Operation Token Mirrors,” resulted in the shutdown of several fraudulent entities, including Gotbit and ZM Quant, and the seizure of over $25 million worth of cryptocurrencies
This groundbreaking operation marked one of the first times law enforcement directly used a crypto asset to investigate fraud, setting a precedent for future regulatory actions in the digital currency space.
