The FBI has uncovered a "wash trading" operation involving cryptocurrency developers, promoters, and market makers. According to the U.S. Department of Justice, four cryptocurrency companies and their employees have been accused of manipulation and embezzling significant funds.
Kaiko Research reported that the FBI created the company NexFundAI and issued a token to expose the scheme. The investigation revealed how tokens were moved between market makers' wallets and used for fraudulent trading on Uniswap. In the end, 18 individuals involved in the fraudulent scheme were identified, making false statements about tokens to attract investors.
The FBI has arrested several participants, confiscating over $25 million in cryptocurrency.