the founder of the crypto-exchange is on trial in the USA

Aleksei Andriunin, founder of the crypto-exchange Gotbit, was extradited to the USA from Portugal and appeared before the federal court in Boston. For him, Gotbit, and two other of its directors, Fedor Kedrov and Qawi Jalili, the charge is market manipulation and fraudulent conspiracy. 

Gotbit: the founder of the crypto-exchange is now on trial in the USA 

Aleksei Andriunin, founder of the crypto-exchange Gotbit, was extradited to the USA last February 25, after being under arrest in Portugal since October 8, 2024. 

Now, Andriunin appeared before the federal court in Boston and was ordered to be detained, pending the next hearing. 

Thecharge against him, as well as Gotbit and its other two directors Fedor Kedrov and Qawi Jalili, is market manipulation and wire fraud. 

This is a true associazione a delinquere that allegedly saw Andriunin, the 26-year-old Russian residing in Portugal, play a crucial role. 

In fact, between 2018 and 2024, the well-known “market maker” of Gotbit allegedly provided market manipulation services to create artificial trading volume for various cryptocurrency companies, including those located in the United States. 

In a 2019 interview with Andriuin, the CEO and founder of Gotbit described the way he developed a code for cryptocurrency “wash trade”. Essentially, this code artificially inflated the trading volume in order to get crypto listed on CoinMarketCap and traded on larger crypto-exchanges.

Both Andriunin and Jalili (sales director of Gotbit) and Kedrov (market making director of Gotbit), allegedly marketed these wash trading tactics to potential clients. 

In any case, Gotbit allegedly conducted wash trading operations worth millions of dollars on behalf of clients, and allegedly received tens of millions of dollars in proceeds related to these fraudulent services. Andriunin allegedly transferred millions of dollars of Gotbit’s proceeds to his personal Binance account.

Gotbit: the founder of the crypto-exchange risks up to 20 years in prison

Behind the current charges against the founder and the two directors of Gotbit, there are the respective penalties. 

In fact, for telematic fraud, the accused could face up to 20 years in prison, up to three years of supervised release

Regarding l’associazione a delinquere aimed at market manipulation and telematic fraud, the penalty is up to five years in prison, up to three years of probation.

In both cases, there is also a fine of up to 250,000 dollars or double the gain or gross loss of the offense, restitution, and forfeiture.

The present case refers to what happened last October 2024, when the USA government agency had created a fake token to uncover some crypto frauds.

In practice, with NexFundAI, the crypto company of the law enforcement and the its ERC-20 token just launched, had contacted some traders to manipulate the market, and they would have obliged. 

From the various conversations, 18 entities (3 crypto companies and 15 individuals) emerged who were then accused of operating internationally to defraud investors with widespread manipulations in the crypto markets. 

The three companies were Gotbit Consulting LLC, ZM Quant Investment LTD, and CLS Global FZC, LLC. Among the 15 individuals, Aleksei Andriunin, Fedor Kedrov, and Qawi Jalil of Gotbit stand out. 

The technique of wash trading

In general, wash trading is by definition a market manipulation technique. 

Specifically, the platforms act simultaneously, selling and buying many cryptos, and by doing so, they increase the volumes on the exchanges, appearing to third parties as a valid platform where there is a lot of activity and liquidity.

As early as the distant 2019, the technique of wash trading had begun to spread in the cryptocurrency sector.

In fact, a new research from that time had analyzed 24 exchanges, showing that only 4 were honest in declaring their true volumes on their platforms. 

On the contrary, 10 exchanges would have falsified their volumes by up to 70%, and another 10 would have falsified by less than 50%. 

This research analyzed as many as 24 exchanges, of which only 4 appear sincere in declaring the true volumes of their platforms; as many as 10 exchanges have instead falsified their volumes by up to 70%, while the remaining 10 have falsified less than 50%:

This research analyzed as many as 24 exchanges, of which only 4 appear sincere in declaring the true volumes of their platforms; as many as 10 exchanges have instead falsified their volumes by up to 70%, while the remaining 10 have falsified less than 50%:

Wash trading has been considered illegal in most jurisdictions.

This research analyzed as many as 24 exchanges, of which only 4 appear sincere in declaring the true volumes of their platforms; as many as 10 exchanges have instead falsified their volumes by up to 70%, while the remaining 10 have falsified less than 50%: