The FBI recently uncovered a wash trading scheme involving CLS Global, a crypto market-making firm based in the United Arab Emirates. Following that, a US federal court in Boston fined the company $428,059.
The Massachusetts U.S. Attorney’s Office revealed that CLS Global pleaded guilty to conspiracy to commit market manipulation and wire fraud. As part of the sentencing, the firm is banned from operating in the U.S. for the next three years.
CLS Global FZC LLC, a financial services firm known in the cryptocurrency industry as a “market maker,” was sentenced today for cryptocurrency “wash trading,” following an #FBI Boston investigation. https://t.co/GvUzDMy4DT pic.twitter.com/V87GCP4R66
— FBI Boston (@FBIBoston) April 2, 2025
The FBI and other enforcement agencies have been working to uncover crypto-related fraud. The Bureau of Investigation conducted an undercover investigation involving a fake token known as NexFundAI. The token was launched in May 2024 and was bait for fraudulent platforms.
CLS Global and two other firms fell for the bait. These firms reportedly agreed to help boost the token’s trading volume through artificial means. This practice is known as wash trading. The goal was to make NexFundAI appear more active and appealing to potential investors. Authorities also charged CLS employee Andrey Zhorzhes individually.
Wash trading remains a concern
Wash trading remains a serious problem in the crypto world. Chainalysis estimates that at least $2.6 billion of crypto trades were wash trades in 2024. This is around 2% of daily trading volume. But other research suggests the problem could be much bigger, especially on unregulated exchanges. The CLS case reflects growing interest from regulators on crypto crimes.
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