US prosecutors have brought criminal charges against 14 individuals and four financial firms for alleged cryptocurrency fraud and market manipulation. This marks the first such case aimed at financial service institutions in the cryptocurrency sector. Gotbit, ZM Quant, CLS Global, and MyTrade, as well as their leaders and employees, were hit with charges in a sweeping crackdown on crypto-related crimes. The arrestees also include people living abroad.
The US government reports that, in all, it has levelled charges against 18 people and businesses for their part in cryptocurrency fraud and manipulating the market, an illegal practice. Reports suggest that five defendants have either agreed to plead guilty or have already done so. This action comes amid increased scrutiny of the cryptocurrency industry, as concerns grow over the safety of crypto assets in the face of potential hacking and fraud.
The US, in comparison to other countries, has seen its citizens lose significant sums to cryptocurrency scams. This led to losses reportedly in the billions, with the Federal Bureau of Investigation (FBI) revealing that Americans lost an estimated $5.6 billion in 2023 alone to such fraudulent practices.
An FBI report underscored the frequent occurrence of crypto-related fraud and crime throughout the United States. The report stated, “Over the years, cryptocurrency’s widespread promotion as an investment vehicle, combined with a mindset driven by a ‘fear of missing out (FOMO),’ has provided a fertile ground for criminals to prey on consumers and retail investors.”
The specifics around an upcoming court hearing are yet to be released.