In a sweeping crackdown on crypto fraud, the United States Securities and Exchange Commission (SEC), along with the FBI and Department of Justice (DOJ), have filed charges against four major cryptocurrency firms and nine individuals for market manipulation and fraud. The civil suits, filed in the District Court of Massachusetts on October 9, target Gotbit Consulting, ZM Quant Investment, CLS Global, and various individuals tied to fraudulent activities.

Gotbit Consulting, alongside its marketing director Fedor Kedrov, allegedly manipulated the market through wash trading, creating fake demand for crypto tokens such as Saitama and Robo Inu. These projects were orchestrated by Vy Pham, a Vietnamese citizen residing in California, who now faces multiple charges, including unregistered securities offerings and market manipulation. Pham and some of her associates have already agreed to partial settlements.

The other firms, ZM Quant and CLS Global, are facing similar charges, particularly involving a cryptocurrency named NexFundAI, which was created by the FBI. The charges extend across multiple countries, with defendants located in Russia, London, Hong Kong, and India.

In a joint effort, the SEC seeks injunctions, fines, and recovery of profits from the fraudulent activities, while the FBI has expanded its investigation to include other cryptocurrencies linked to this operation. The DOJ has named a total of 18 individuals, plus another firm, MyTrade MM, in connection with the fraudulent schemes.

This massive takedown serves as a reminder of the growing regulatory scrutiny in the crypto industry as authorities aim to crack down on deceptive practices.