CLS Global, a financial services company that operates as a “market maker” in the cryptocurrency industry, has agreed to settle criminal charges related to fraudulent market manipulation.
This company deceived investors by creating fake trading volumes through automated trading on Uniswap.
FBI Detects Fraudulent Cryptocurrency Transactions Through Undercover Operations
According to Notification from the US Attorney’s Office in Boston, CLS Global will pay a fine of $428,059. The penalty includes both fines and confiscation of crypto assets. Additionally, the company will be banned from participating in the US cryptocurrency market.
Firma will plead guilty to charges from a 2024 indictment from a federal grand jury in Boston, including conspiracy to commit market manipulation and wire fraud.
CLS Global has been accused of engaging in “ring trading.” This is a fraud in which a company inflates the trading volume of a cryptocurrency by buying and selling the same asset, creating the illusion of market activity without actual risk. .
The company, headquartered in the United Arab Emirates, provides market making services to cryptocurrency businesses. Although based outside the United States, CLS Global provided services to US investors through its website and public promotional materials.
The above charges are the result of an undercover investigation by the FBI targeting cryptocurrency ring trading.
“As a result of the FBI Boston investigation, CLS Global FZC LLC, a cryptocurrency financial services firm known in the industry as a “market maker,” has agreed to resolve criminal charges related to regarding cryptocurrency ring transactions,” the FBI said in a statement tweets.
As part of the investigation, authorities established a fake cryptocurrency business called NexFundAI. CLS Global was then hired to create fake trading volumes for NexFundAI’s Tokens to meet cryptocurrency exchange listing requirements.
In meetings that took place in mid-2024, a CLS Global employee explained that the company could “assist in generating transaction volume” by using algorithms to make it appear that transactions were natural trading activity. The employee admitted that the action was round-the-clock trading but downplayed its ethical implications.
“The Securities and Exchange Commission has brought a civil enforcement action regarding alleged violations of the securities laws and has reached a private settlement with CLS Global,” the announcement added.