US DOJ Indicts Gotbit Founder for Market Manipulation as the FBI Saga Drags On

The US Department of Justice (DOJ) has indicted Aleksei Andriunin, the founder of Gotbit, for his alleged role in a massive market manipulation and wire fraud scheme.

In an October 31 press release, the federal prosecutors accused the Russian national of masterminding a conspiracy involving his company and two other market makers; ZM Quant and CLS Global.

Andriunin, 26, is accused of aiding the artificial inflation of trading volumes through “wash trading” from 2018 to 2024. His role as CEO has placed him at the center of the investigation, which involved the FBI, US SEC, US prosecutors, and 18 other entities.

The FBI Saga Etymology

The Federal Bureau of Investigation (FBI) launched an undercover operation, creating a fake crypto company with a token on the Ethereum network to investigate market manipulation allegations brought to its notice. This operation led to the discovery of Andriunin’s alleged role in keeping detailed records of Gotbit’s manipulative practices, including wash trading, which artificially inflated trading volumes.

As soon as the force uncovered the operations of these illegal market makers, it revealed them to the federal prosecutors, who charged the three involved crypto firms, Gotbit, ZM Quant, and CLS Global. The US prosecutors also indicted 15 individuals with fraud-related offenses and arrested four arrests, recovering $25 million worth of crypto assets.

Gotbit directors Fedor Kedrov and Qawi Jalili were also named in the indictment. They were previously accused of engaging in crypto wash trading. The investigation revealed that two prominent meme coins, Saitama and Robo Inu, were listed in Gotbit’s client zone. These meme coin organizations face separate charges for involvement in a “pump-and-dump” scheme.

A Pump and Dump Scheme 

Prosecutors claim Gotbit executed wash trades worth millions, generating tens of millions in fraudulent revenue. Andriunin was also accused of funneling large sums to his Binance account.

Acting US Attorney Joshua Levy described this scheme as a pump and dump scheme.

“Gotbit allegedly made wash trades worth millions of dollars on behalf of clients and received tens of millions of dollars in proceeds for these fraudulent services,” he said. 

Aleksei faces severe penalties following the gravity of charges announced by the US DOJ. For wire fraud, he may receive up to 20 years in prison, three years of supervised release, and a fine of up to $250,000 or twice the gross gain/loss.

Additionally, Andriunin faces up to five years imprisonment for market manipulation charges, with potential penalties including restitution and forfeiture.