The US Department of Justice (DOJ) has charged Aleksei Andriunin, founder and CEO of crypto firm Gotbit, with fraud and market manipulation.
Details of the Accusations
According to the statement made by the Massachusetts District Attorney’s Office, 26-year-old Russian citizen Aleksei Andriunin and two Gotbit executives allegedly offered and promoted crypto market manipulation services between 2018 and 2024.
According to authorities, Gotbit, while operating as a market maker at the time, was engaging in market manipulation to artificially increase the transaction volumes of crypto projects. Andriunin and others were using the “wash trade” method to inflate the transaction volume of crypto assets and get them listed on platforms such as CoinMarketCap. Gotbit markets these fraudulent tactics to potential customers and has fraudulently made tens of millions of dollars by transacting crypto assets on their behalf.
Criminal Sanctions and Possible Consequences
According to the statement, Andriunin is thought to have transferred a large portion of Gotbit’s revenues to his personal Binance account. Wash trading is the buying and selling of an asset by the same party, creating a misleading impression that there is market demand and activity. If the charges are confirmed, Andriunin could face up to 20 years in prison for fraud and up to 5 years in prison for market manipulation and conspiracy to defraud. Additionally, additional sanctions such as fines, damages and asset confiscation may also apply.
The Massachusetts District Attorney’s Office stated that Gotbit generated significant revenue by marketing its illegal services and transacting crypto assets on behalf of its customers.
Such accusations once again reveal the importance of regulation and supervision in crypto markets. Transparency and legal compliance of companies operating in the market are of critical importance for investors.
While regulations on crypto assets are expected to increase internationally, authorities continue to take steps to combat fraud and manipulation. The outcome of this case is expected to set an important example for the crypto industry and be effective in preventing similar irregularities.
The defenses of Gotbit and the relevant executives have not yet been shared with the public. More details are expected to emerge in the later stages of the case.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
