CLS Global, a UAE-based crypto market maker, pleaded guilty to market manipulation charges brought against it by US prosecutors — after a sting operation that couldn’t be more cinematic.
According to the US Attorney’s Office, CLS, which provides crypto services to American investors, is accused of pumping the NexFundAI token. But get this, that token was an FBI creation.
The Dubai-based company was one of three firms charged with market manipulation and “wash trading” in crypto markets in October 2024, a first for the industry.
The FBI laid the trap by launching the digital token and posing as a crypto firm to bait bad actors.
Operation Token Mirrors
CLS was among the three market makers that took the bait and engaged in wash trading — a deceptive practice where trades are manipulated to inflate a token’s volume and value.
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This undercover operation called “Operation Token Mirrors” will cost CLS $428K in fines. It’s also banned from operating on US-based crypto trading platforms.
More than $25 million worth of crypto was seized in the operation and multiple trading bots responsible for millions of dollars’ worth of wash trades were deactivated.
In October last year, seven firms were fined for breaching market regulations in the UAE, and DeFi scams have grown alongside the city’s burgeoning crypto scene.
Read more: Inside the hunt to recover WazirX’s stolen crypto millions
And while the US is stepping up its crypto game with clearer and friendlier crypto regulations with the second coming of President Donald Trump, it seems like its watchdogs are also turning up the heat on blockchain bad actors.
NexFundAI, by the way, only traded once — on 31 May last year for a measly $4,600 in fake volume.
Edited by Ankush Chibber. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
