Aleksei Andriunin, the founder and CEO of the cryptocurrency marketing maker firm Gotbit, was extradited from Portugal to the United States to be prosecuted for fraud charges. The 26-year-old Russian national was accused of conducting widespread manipulation of the market to manipulate token prices for paying client cryptocurrency companies.
Aleksei Andriunin was arrested in Portugal in October last year and subsequently indicted by a Boston grand jury on charges of wire fraud and conspiracy to commit market manipulation and wire fraud. The charges, if combined, will result in a sentence of at least 25 years in prison. The Gotbit firm was also charged with fraud and two of its directors, Fedor Kedrov and Qawi Jalili, were also charged with fraud.
The Charges Against Gotbit
According to the prosecutors, the fraud occurred between 2018 and 2024. Gotbit is accused of providing market manipulation services for hire. They offered their token price-inflating services to various crypto companies, including companies based in the U.S. As per the reports, Aleksei Andriunin was well aware of the fraudulent nature of the services Gotbit offered and even once admitted that his business was not entirely ethical.
Gotbit is also accused of making tens of millions of dollars from fraudulent transactions over the years. It was discovered that Aleksei Andriunin had siphoned millions of dollars of Gotbit’s proceeds into his personal Binance account. Aleksei Andriunin was accused of the following charges. 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 charge of conspiracy to commit market manipulation and wire fraud amounts to a sentence of up to five years imprisonment, up to three years of supervised release, Restitution, forfeiture, and fines ranging from twice the gross gain or loss from the offense to $250,000. The trial will be conducted in a court of law to prove that the accused are guilty beyond a reasonable doubt in the court of law.
NexFundAI (NEXF): FBI’s Trap Token
US Federal Bureau of Investigation’s NexFundAI (NEXF) program was used to trap such fraudsters as Gotbit. NexFundAI’s NEXF tokens were a trap token to trap fraudsters in the cryptocurrency space. This Ethereum-based token was developed and deployed by the FBI to protect unsuspecting investors from falling into the hands of fraudsters. It serves as a sophisticated tool for law enforcement and is a real digital asset. The project gets involved in the market, monitors the market activities to find out any fraudulent transactions, and gathers shreds of evidence against them to prosecute them.
The initiative was formed as part of Operation Token Mirrors aimed at identifying and apprehending individuals and organizations that exploit the cryptocurrency ecosystem for illicit gains. This operation has identified several wash trading attempts that artificially inflated trading volumes, misleading investors about the value of various cryptocurrencies, including that of NexFundAI.
Three market-making firms, Gotbit, CLS Global, and MyTrade, were found guilty of fraudulent behavior during Operation Token Mirrors. Even though orchestrated by the US government, the scope of Operation Token Mirrors spanned internationally, and fraudsters were arrested from other nations such as Portugal.
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The Bottom Line
Aleksei Andriunin’s extradition to the US and Gotbit’s attempts at fraud through market manipulation is a reminder for investors to exercise utmost caution at times of transactions in the realm of digital currencies. Gotbit was a “market-maker” in the sense that they used to attempt to manipulate the market to suit their needs.
The digital currency market, due to a lack of regulatory oversight, is home to many fraudsters and scammers. It is important to invest your hard-earned money in legitimate projects to avoid losses. You should do your own research before investing and invest only in those projects that have a legitimate website and whitepapers detailing the purpose of the project.
