The founder of MyTrade, a cryptocurrency firm that was caught wash trading by the FBI, pleaded guilty on Wednesday to manipulating crypto markets for his client firms.
Liu Zhou was arrested in the wake of the FBI’s “Operation Token Mirrors,” a sting that used an FBI-created token called NexFundAI to out various companies engaging in wash trading. The FBI discovered 60 cryptocurrencies involved in the scheme and seized $25 million worth of crypto assets.
Zhou and MyTrade offered a service called Volume Support that used bots to repeatedly buy and sell any desired token, artificially inflating their volume.
However, the scheme came crashing down when FBI agents posing as NexFundAI advisors approached the company with a view to becoming one of its clients. At this point, the 39-year-old revealed that his firm “does self-trades — a buy and a sell in the same second,” and executes “pump and dumps.”
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Zhou also revealed MyTrade’s goal of finding “other buyers from the community, people you don’t know about or don’t care about,” saying “we have to make [the other buyers] lose money in order to make profit.”
A guilty plea was submitted in a federal court in Boston. Zhou admitted to conspiracy to commit market manipulation and wire fraud. He is scheduled for sentencing on February 27, 2025.
As part of his plea, he must cease operations of Volume Support and include this disclaimer on his site, “Volume support is a form of wash trading and illegal under the laws of the United States.”
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