An Empire of Fake Trades: DOJ Reveals Conspiracy Inside Crypto Markets

The U.S. Department of Justice (DOJ) announced on Thursday that Aleksei Andriunin, the founder and CEO of cryptocurrency financial services firm Gotbit, has been indicted on charges of wire fraud and conspiracy to commit market manipulation and wire fraud.

Aleksei Andriunin, a Russian national residing in Portugal, has been indicted by a grand jury in the District of Maryland for his role in a wide-ranging conspiracy to manipulate cryptocurrency markets on behalf of client cryptocurrency companies, the Justice Department announced Thursday.

Andriunin, the founder and CEO of cryptocurrency financial services firm Gotbit, is charged with one count of wire fraud and one count of conspiracy to commit market manipulation and wire fraud, according to a statement from the DOJ.

Prosecutors allege that Andriunin orchestrated an extensive market manipulation scheme through Gotbit, a company known as a “market maker” in the crypto industry. Specifically, they claim that Gotbit engaged in a practice called wash trading, in which artificial trades are generated to give the impression of active market interest.

This tactic, according to court documents, helped Gotbit’s clients—which included companies in the U.S.—achieve listings on platforms like Coinmarketcap and gain access to larger cryptocurrency exchanges.

“Gotbit provided market manipulation services to create artificial trading volume for multiple cryptocurrency companies, including companies located in the United States,” the DOJ statement reads.

Andriunin allegedly maintained records comparing this “Created Volume” from wash trades to actual market volume and marketed these fraudulent services to potential clients, promising to boost their visibility and trading success.

In addition to Andriunin, Gotbit directors Fedor Kedrov and Qawi Jalili were also implicated in the alleged scheme.

If convicted, Andriunin could face substantial penalties. “The charge of wire fraud provides for a sentence of up to 20 years in prison, up to three years of supervised release, a fine of up to $250,000 or twice the gross gain or loss from the offense, restitution and forfeiture,” the Justice Department detailed. “The charge of conspiracy to commit market manipulation and wire fraud provides for a sentence of up to five years in prison, up to three years of supervised release, a fine of up to $250,000 to twice the gross gain or loss from the offense, restitution and forfeiture.”

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