Gushiken Yona
A dark cloud hangs over the cryptocurrency “market maker” Gotbit. CEO Aleksei Andriunin and two of his partners face federal charges of wire fraud and market manipulation, casting a stark light on the shadowy practices that can plague the crypto market.
The Justice Department alleged a sophisticated scheme involving wash trading to artificially inflate trading volumes, potentially impacting popular meme coins like Saitama and Robo Inu. The indictment, unsealed this week, accuses Andriunin, 26, along with Gotbit directors Fedor Kedrov and Qawi Jalili, of orchestrating a multi-faceted fraud.
At the center of the scheme, prosecutors alleged was a code developed by Andriunin specifically designed for wash trading. This practice involves creating artificial trading activity by simultaneously buying and selling the same asset, creating a false impression of high volume and liquidity.
In a 2019 interview, Andriunin allegedly boasted about this code, explaining how it was used to inflate trading volumes for cryptocurrencies seeking listings on platforms like CoinMarketCap and larger exchanges. This alleged manipulation aimed to create a deceptive appearance of popularity and legitimacy, potentially luring unsuspecting investors.
The indictment further claims that Andriunin meticulously documented Gotbit’s market manipulation activities, maintaining spreadsheets that compared the artificially generated “Created Volume” with the legitimate “Market Volume.” This detailed record-keeping, prosecutors argue, demonstrates a clear intent to deceive.
The alleged scheme extended beyond Gotbit’s internal operations. Andriunin, Jalili (Director of Sales), and Kedrov (Director of Market Making) allegedly marketed these wash trading services to prospective clients, explaining how Gotbit used multiple accounts to avoid detection on the public blockchain. Prosecutors allege that Gotbit executed millions of dollars worth of wash trades for clients, receiving tens of millions of dollars in proceeds for these fraudulent services.
Among Gotbit’s clients, according to the indictment, were the leadership teams of the Saitama and Robo Inu cryptocurrency projects, who are facing separate charges. These meme coins, known for their volatile price swings and enthusiastic online communities, were potentially vulnerable to manipulation.
Finally, the indictment alleges that Andriunin transferred millions of dollars of Gotbit’s illicit proceeds into his personal Binance account, further implicating him in the alleged scheme. If convicted of wire fraud, Andriunin, Kedrov, and Jalili face a maximum sentence of 20 years in prison, three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss from the offense, restitution, and forfeiture.
The case, brought by the U.S. Attorney’s Office for the District of Massachusetts, underscores the increasing scrutiny of cryptocurrency markets and the Justice Department’s commitment to pursuing those who engage in fraudulent activities.
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Yona has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Daily is an official media and publication of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
