So, Massachusetts is out here playing crypto cop, and they just slapped UAE-based CLS Global with a $428K fine. Because apparently, wash trading is the new black market. 🕵️♂️
A federal court in Boston decided to make an example out of CLS Global on April 2, because nothing says “justice” like a six-figure fine and a three-year ban from the U.S. market. Probation, but make it crypto. 💸
CLS Global, the UAE’s finest (or not-so-finest) crypto market maker, pleaded guilty to conspiracy and wire fraud in January. Because when you’re in the business of manipulating markets, why not go all in? 🤷♀️
CLS Fell for the FBI’s “Trap Token” Like a Fish to Bait
Here’s the kicker: the FBI created a fake token called NexFundAI in May 2024 as part of a sting operation. And CLS Global? They bit. Hard. 🎣
CLS was one of at least three firms that agreed to “market make” for NexFundAI, which is basically like agreeing to be the hype man for a scam. The SEC also came after CLS and their employee, Andrey Zhorzhes, in October 2024. Because nothing says “career move” like being charged with fraud. 🚨
CLS Global: The Resume of Shame
According to CEO Filipp Veselov, CLS Global was founded in 2017 to fill a “huge gap in the market.” Spoiler: the gap was for shady practices. 🕳️
Before CLS, Veselov worked at Latoken, a Russian crypto exchange with 370,000 followers on X. Because if you’re going to fail, fail big. The CLS team also includes Pavel Singaevskii, who used to work at Stex, a crypto platform that ghosted everyone in 2023. Classy. 👻
Despite all this, CLS Global’s X page is still up and running with over 110,000 followers. Because in crypto, even a scandal can’t kill your social media game. 📱
Wash Trading: The Dirty Little Secret of Crypto
Wash trading is when you buy and sell the same asset to make it look like there’s demand. It’s like clapping for yourself at a comedy show. 👏
According to Chainalysis, the crypto market has about $2.6 billion in wash traded volumes. That’s 2% of daily trading volumes, which is either a lot or a little depending on how much coffee you’ve had. ☕
Some studies say wash trading could be as high as 70% on unregulated exchanges. So, basically, the crypto market is a giant game of “Who’s Lying the Most?” 🎲
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2025-04-04 13:30