Cryptocurrency market maker Gotbit has surrendered approximately $23 million in digital assets following charges of market manipulation. The company and its founder, Aleksei Andriunin, pled guilty in federal court in Boston to conspiracy to commit wire fraud. Pretty straightforward case of greed meets consequences.
Another crypto player falls as justice catches up with manipulation schemes and phantom liquidity.
The firm wasn't exactly subtle about its operations. They engaged in classic market manipulation tactics—wash trading (buying and selling the same asset to create fake volume) and spoofing (placing orders they never intended to execute). From 2018 to 2024, they conducted millions of wash trades to artificially inflate trading volumes for clients. Clients paid tens of millions for these deceptive services. Gotbit fundamentally made money by making money look like it was making money. Meta.
Andriunin now faces up to two years in prison according to the plea agreement. He'll also serve 36 months of supervised release afterward—during which he's banned from cryptocurrency activities. Tough break for someone who built their entire career on digital tokens.
The investigation that caught them was pretty clever. The FBI created its own digital token in an operation dubbed "Token Mirrors" to catch the fraudsters red-handed. Andriunin was eventually extradited from Portugal to face charges. Fifteen other individuals and three firms were charged alongside Gotbit.
Among the seized assets were popular stablecoins USDT and USDC, spread across multiple wallets controlled by Gotbit Consulting LLC. Authorities froze the accounts once they connected the dots. The case is linked to other cryptocurrency fraud schemes where a Massachusetts resident was defrauded in a romance scam that led to significant financial losses. Similar schemes have cost victims billions annually in the crypto Wild West atmosphere where regulation remains limited.
This case highlights the growing regulatory attention on cryptocurrency markets. Investor protection and market integrity aren't just buzzwords anymore—they're becoming enforcement priorities. The crypto Wild West days are numbered.
The case connects to broader cryptocurrency fraud concerns, including "pig butchering" scams that have plagued the industry. Various agencies, including the Secret Service, are stepping up their game with blockchain monitoring tools to track illicit activity.
No additional fines beyond the asset forfeiture were imposed. Sometimes losing $23 million is punishment enough.
