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Did The FBI Launch A Crypto Project? - Details Of FBI’s Fraud Investigation

 

By Reel Coverage Oct 15, 2024

 

The Federal Bureau Of Investigation(FBI) of the United States launched a crypto project called “NextFundAI” to investigate fraud within the cryptocurrency ecosystem.

 

 

 

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In its first ever criminal charges against financial services firms for market manipulation and wash trading in the cryptocurrency ecosystem, the FBI charged 18 individuals and four firms. 

 

The crypto security project, NextFundAI, offered shares in an AI-related fund according to the FBI's formal statement at Massachusetts Federal District Court. 

 

In a movement it dubs “Operation Token Mirrors,” the FBI targeted nefarious token developers, promoters, and market makers in the crypto industry. 

 

FBI Launches Crypto Project

 

The Federal Bureau Of Investigation(FBI) of the United States launched a crypto project, which became tradeable on Lbank, on Oct. 02, 2024. 

 

NextFundAI, a scheme orchestrated by the FBI to investigate fraud within the cryptocurrency ecosystem, had its token, NEXF, traded on Lbank, to which a prominent market maker, MyTrade MM, helped spoof the tokens trading volume to mislead market participants into buying into the trend, thereby extracting millions of dollars from the market by selling the tokens at its artificially inflated prices. 

 

ZM Quant, CLS Global and MyTrade market making firms were charged alongside their employees for allegedly wash trading and/or conspiring to wash trade on behalf of NexFundAI, a cryptocurrency company and token created at the direction of law enforcement as part of the government’s investigation. 

 

Gotbit, a prominent crypto market maker was also charged for a similar scheme. Amongst all charged, some have agreed to plead guilty, including Liu Zhou, founder of MyTrade MM.

 

At the time of writing, the FBI has directed the general public, who had bought into NextFundAI’s token, NEXF, thus incurred losses to reach out.