U.S. authorities have charged ten individuals linked to four cryptocurrency firms in a coordinated crackdown on market manipulation. The indictments, part of “Operation Token Mirrors,” allege the defendants ran a wash trading scheme using fake transactions to artificially inflate token prices and deceive investors. Investigators have seized $1.2 million in USDT connected to the fraudulent activity.
United States authorities have charged ten individuals tied to four crypto firms for their involvement in a market manipulation scheme. The cases were brought by the U.S. Attorney’s Office in the Northern District of California.
The investigation, dubbed “Operation Token Mirrors,” was led by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation. It used blockchain tracking and undercover agents posing as token projects to uncover the manipulation tactics.
At the center of the case is GotBit, a firm that claimed to offer market-making services. Investigators allege the company actually ran a wash trading operation, charging clients fees to create fake trading activity and inflate token prices.
This activity made assets appear more popular than they really were, attracting unsuspecting investors. Authorities traced most transactions back to wallets controlled by the firm, finding nearly all activity was artificial and circular.
Other firms connected to the scheme included Vortex, Antier, and Contrarian. Several suspects were arrested across multiple countries, including Singapore, and some have already pleaded guilty.
The firms used bots and multiple wallets to simulate activity before selling tokens at inflated prices. The investigation has so far led to the seizure of $1.2 million in USDT tied to the scheme.
