ordered<\/a> Liu Zhou, the founder and primary operator of crypto market maker MyTrade, to pay a $10,000 fine for his role in a market-manipulation conspiracy.<\/p>\nU.S. District Judge Angel Kelley imposed the sentence, according to the Department of Justice. Zhou, 41, is a Canadian citizen and Chinese national.<\/p>\n
Federal prosecutors charged Zhou alongside 17 alleged co-conspirators in October 2024. He pleaded guilty to conspiracy to commit market manipulation and wire fraud.<\/p>\n
<\/p>\n
MyTrade provided market-making services through its MyTrade MM website and application. Its products included a feature called \u201cVolume Support,\u201d which allowed crypto projects to select how much artificial daily trading activity they wanted across specified exchanges.<\/p>\n
The platform then used automated bots to repeatedly buy and sell the same cryptocurrencies. Those transactions created the appearance of greater trading volume and market interest without serving a legitimate commercial purpose.<\/p>\n
FBI token exposed MyTrade\u2019s wash-trading service<\/h2>\n
U.S. authorities identified the scheme through an undercover operation involving NexFundAI, a fake crypto company created by law enforcement.<\/p>\n
Investigators launched a website and an Ethereum-based NexFundAI token, which traded on the decentralized exchange Uniswap before authorities disabled it. Undercover agents approached market makers while posing as the project\u2019s promoters.<\/p>\n
During discussions with the purported NexFundAI team, Zhou explained that MyTrade conducted simultaneous purchases and sales of the same asset.<\/p>\n
\u201cMyTrade MM does self-trades \u2014 a buy and a sell in the same second,\u201d Zhou said, according to prosecutors.<\/p>\n
He also said the company\u2019s volume bot could execute \u201cpump and dumps.\u201d In another statement cited by the DOJ, Zhou said the objective was to attract outside buyers because \u201cwe have to make [the other buyers] lose money in order to make profit.\u201d<\/p>\n
MyTrade was still providing its Volume Support service to dozens of clients as of Oct. 1, 2024, the DOJ said.<\/p>\n
Bots supported about 60 cryptocurrencies<\/h2>\n
As part of Zhou\u2019s guilty plea, MyTrade agreed to stop offering Volume Support and permanently deactivate the bots used to create the artificial transactions.<\/p>\n
Prosecutors said the bots had generated millions of dollars in daily wash trades involving approximately 60 cryptocurrencies. The firm was also required to publish a notice on its website acknowledging the legal status of the service.<\/p>\n
\u201cVolume support is a form of wash trading and illegal under the laws of the United States,\u201d the required notice states.<\/p>\n
The U.S. Attorney\u2019s Office for the District of Massachusetts prosecuted the case with assistance from the FBI\u2019s Boston Division.<\/p>\n
The sentence adds to U.S. authorities\u2019 wider enforcement effort against misleading conduct in crypto and event-contract markets. In July, former U.S. Representative George Santos settled a Commodity Futures Trading Commission case involving trades on prediction market Kalshi.<\/p>\n
Santos agreed to return $17,569.98 in gains, pay a $17,500 penalty and accept a three-year ban from trading on CFTC-registered platforms. The CFTC accused him of making misleading public statements while betting on whether he would attend President Donald Trump\u2019s State of the Union address. He neither admitted nor denied the findings.<\/p>\n
Crypto manipulation faces wider regulatory scrutiny<\/h2>\n
Market-manipulation investigations are also increasing outside the United States. South Korean authorities examined more than 40 suspected unfair-trading cases during the first two years of the country\u2019s Virtual Asset User Protection Act.<\/p>\n
Regulators reported or referred more than 30 cases to investigative agencies and identified 25 suspects. Average alleged unlawful gains reached about 1.4 billion won, or roughly $940,000, per case.<\/p>\n
For U.S. crypto projects, Zhou\u2019s case shows that describing artificial activity as market making or volume support does not shield wash trading from fraud charges. The undercover token operation also shows that federal investigators can participate directly in digital-asset markets to identify suspected misconduct.<\/p>\n
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