- Aleksei Andriunin faces charges of wire fraud and market manipulation.
- Gotbit allegedly created an artificial trading volume for cryptocurrency clients.
The U.S. Department of Justice has indicted Aleksei Andriunin, 26, the founder of cryptocurrency financial services firm Gotbit, in a large-scale market manipulation and fraud scheme. Gotbit, along with two of its directors, Fedor Kedrov and Qawi Jalili, has also been charged in connection with these activities. Andriunin, Kedrov, and Jalili allegedly engaged in market manipulation from 2018 through 2024.
According to court documents, Gotbit provided fraudulent “market-making” services for various cryptocurrency companies, including those in the United States. Andriunin, Gotbit’s CEO, allegedly devised and implemented strategies to artificially inflate trading volume. In 2019, Andriunin detailed his methods for “wash trading” in an interview, explaining how his firm used it to enhance market visibility.
Growing Efforts to Combat Cryptocurrency Fraud
The DOJ alleges that Gotbit’s services generated millions in wash trades, and the proceeds totaled tens of millions of dollars. Additionally, Andriunin is accused of personally transferring millions into his Binance account. Furthermore, they allegedly informed potential clients about strategies to circumvent blockchain detection, using multiple accounts to hide wash trading activities. Gotbit’s clients included cryptocurrency projects Saitama and Robo Inu, both of which face separate charges in related schemes.
The penalties for wire fraud could lead to up to 20 years in prison, a $250,000 fine, supervised release, restitution, and forfeiture. Charges of conspiracy to commit market manipulation and wire fraud carry a potential sentence of five years, additional fines, supervised release, restitution, and forfeiture. Moreover, sentences in these cases will be determined by federal district court judges following the U.S. Sentencing Guidelines.
Federal prosecutors have increased efforts to address cryptocurrency fraud. Last month, DOJ authorities arrested leaders of Gotbit, ZM Quant, and CLS Global, resulting in several plea deals and the seizure of $25 million in assets. Acting U.S. Attorney Joshua S. However, Levy emphasized that fraud remains punishable, regardless of the technology involved. The DOJ warns that it will continue to pursue legal actions against cryptocurrency fraud and market manipulation.
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