The FBI’s NexFundAI operation has returned to focus after crypto commentators Evan Luthra and Carl Moon shared new attention-grabbing posts about how U.S. agents allegedly used a fake Ethereum token to catch crypto market makers.
- FBI agents created NexFundAI as a real ERC-20 token to catch alleged wash trading firms.
- Evan Luthra said market makers offered fake volume, chart painting, and bot-driven trading services.
- Crypto.news previously reported NexFundAI led to charges against 18 individuals and entities.
In an X post, Evan Luthra said the FBI created an ERC-20 token called NexFundAI with a 100 billion token supply, a website, and branding built to look like a normal crypto project. He said undercover agents acted as the project team and approached market makers for help creating fake trading activity.
Carl Moon also posted that the FBI had launched its own crypto token to trap scammers. He said the token had a real site and branding, and that alleged scammers soon offered to fake volume for undercover agents.
Crypto.news previously reported that NexFundAI was created as part of Operation Token Mirrors to expose wash trading and pump-and-dump schemes.
Luthra says firms offered fake volume
Luthra said Gotbit, MyTrade, CLS Global, and ZM Quant were among the firms caught in the operation. He claimed Gotbit could push NexFundAI’s volume to $1 million per day in six hours for about $200. He also claimed the firm tracked “fake volume” and “market volume” in internal records.
The post also claimed MyTrade explained the psychology of chart manipulation on a recorded call. Luthra quoted one participant saying, “We make the chart look like a really nice roller coaster ride.” He also quoted the person saying, “We have to make them lose money in order to make profit.”
Retail traders still bought the bait token
Luthra said one of the most striking parts of the case was that real users bought NexFundAI. The token had no real product, no genuine team, and no public utility beyond the investigation, according to his post. Yet fake-looking momentum was enough to attract retail buyers.
He also claimed the FBI later had to set up a restitution portal after liquidity was removed and some users lost money. Luthra added that another actor cloned the NexFundAI smart contract within 24 hours of the DOJ announcement and made $127,000 by using the same hype-driven pattern.
Wider fallout
Crypto.news previously reported that the FBI’s operation led to charges against 18 people and entities. The same report named ZM Quant, CLS Global, MyTrade, and Gotbit in connection with alleged wash trading and market manipulation.
Related coverage also reported that CLS Global received a $428,000 fine for wash trading tied to NexFundAI. The firm was placed on three years of probation and barred from offering services in the U.S. during that period.
In a later crypto.news update, the FBI warned that scammers were using fake tokens on Tron that appeared to copy law enforcement branding. That report also referenced NexFundAI as an earlier example of an FBI-created token used to expose wash trading.
Luthra said the FBI later ran another operation involving a token called Lexobit, which led to 10 more arrests. His post claimed IRS forensics found 1,209 out of 1,221 trades in one firm’s activity went back to wallets it controlled. The wider message was clear: fake volume can make a token look active while real traders become exit liquidity.
