The U.S. Department of Justice announced the guilty plea of ​​Liu Zhou, founder of crypto market making company MyTrade, to charges related to market manipulation.

Zhou, 39, admitted to engaging in “wash the trade“- the practice of artificially inflating asset prices by simultaneously executing buy and sell orders to create the illusion of high trading volume. His sentencing is scheduled for early next year.

Zhou’s operation, known as MyTrade MM, allegedly misled customers by executing personal trades and setting up “pump and dump” schemes, manipulating token prices and misleading buyers into error by encouraging them to invest at inflated values. Zhou reportedly said the company’s goal was to “locate other buyers in the community” and take advantage of unsuspecting investors.

This case is part of a broader DOJ crackdown on crypto market manipulation, along with other companies like Gotbit, CLS Globaland ZM Quant are also accused of inflating token volumes. These companies allegedly engaged in similar practices, making the tokens appear more active and valuable than they actually were, often selling them at inflated prices to outside investors.

One of the accused companies, CLS Global, responded by contacting U.S. authorities and saying it planned to improve its processes. Filipp Veselov, CEO of CLS Global, said: “We recognize that there may be areas where we can improve our processes, and we are open to constructive dialogue with regulators. » The company added that it was actively working to restrict engagement with US customers.

The SEC also charged in 2023 Sigma Chain, a trading company owned and controlled by CZ, founder of Binanceto engage in wash trading on the platform of its subsidiary based in the United States. This involved artificially inflating the trading volume of crypto asset securities, creating a misleading perception of market activity to give a false sense of liquidity on Binance.US.