A large-scale fraud operation has been uncovered in the cryptocurrency world. The FBI has exposed individuals and companies that have been manipulating the digital asset market by creating their own fake cryptocurrency NexFundAI as part of “Operation Token Mirrors”. This incident has once again brought to the fore the issues of reliability and transparency in the cryptocurrency market.
The big game in the cryptocurrency market: How was the FBI used to use the NexFundAI fake token?
The US Department of Justice (DoJ) announced that a large-scale fraud operation in the cryptocurrency market has been uncovered, and several individuals and companies have been arrested as part of the operation. At the heart of the operation is the FBI’s creation of its own cryptocurrency for the first time in history. This new cryptocurrency , NexFundAI , was presented as a secure store of value in the world of finance and artificial intelligence. However, this token was actually part of a fraud investigation conducted by the FBI.
In this operation, three market-making companies, ZM Quant , CLS Global , and MyTrade, as well as individuals working for these companies, were charged with allegedly artificially inflating the market value of NexFundAI by making fake transactions. These alleged market manipulations aimed to mislead investors by increasing the price of cryptocurrencies and thus make a profit.
The operation resulted in 18 individuals and companies facing fraud charges, five of whom pleaded guilty or reached agreements. Some of the perpetrators were arrested in Texas, the United Kingdom and Portugal. The operation also resulted in the seizure of more than $25 million in cryptocurrencies. Several trading bots that were creating market movements through fake trades were taken offline.
In this type of scam, criminals create the impression that the market is active by buying and selling their own cryptocurrencies. These fake transactions are made to attract potential investors, and after prices are artificially inflated, criminals sell their assets at high prices and make huge profits. Such operations are similar to the scam method known as pump-and-dump , which is common in the cryptocurrency world .
The Justice Department stated that this operation once again showed how cryptocurrency investors can be victimized by manipulations in the market. It was stated that investors were deceived with promises of high profits and market makers were involved in such scams. Sanjay Wadhwa , Deputy Chairman of the US Securities and Exchange Commission (SEC) , stated that this incident targeted investors with false promises of profits in crypto markets and that investors should be careful.
