Gotbit Founder Indicted in Crypto Market Manipulation Crackdown

The U.S. Department of Justice announced that Aleksei Andriunin, the 26-year-old founder of cryptocurrency market-making firm Gotbit, has been indicted on charges of wire fraud and conspiracy to commit market manipulation. The indictment accuses Andriunin and Gotbit of orchestrating a scheme to artificially inflate trading volumes for various cryptocurrency companies, including some based in the United States, between 2018 and 2024. The allegations are part of an extensive federal investigation into fraudulent practices within the cryptocurrency industry.

The Justice Departments superseding indictment, which expands upon previous charges, also names Gotbit directors Fedor Kedrov and Qawi Jalili. Both Kedrov and Jalili were initially charged on October 9, when authorities unveiled a broader probe targeting multiple crypto firms. This investigation has resulted in four arrests, five guilty pleas, and the confiscation of over $25 million in cryptocurrency assets.

Federal prosecutors assert that Gotbits alleged manipulation services involved creating artificial trading volumes to enhance the appearance of market activity for its clients, a tactic often used to mislead potential investors. These practices can manipulate asset prices, driving uninformed or unsuspecting investors to buy into cryptocurrencies based on misleading data. Andriunin, Kedrov, and Jalili were allegedly pivotal in executing these schemes under the guise of offering legitimate market-making services.

If convicted of wire fraud, Andriunin faces a maximum prison sentence of 20 years. Additionally, a conviction for conspiracy to commit market manipulation and wire fraud could add another five years to his potential prison time, according to the Justice Departments statement. As of Thursday, Andriunin, Gotbit, and the implicated directors have not responded to requests for comment.

This indictment represents a growing crackdown by U.S. authorities on deceptive practices in the digital asset space. Earlier in October, federal prosecutors also filed charges against other crypto firms, including ZM Quant and CLS Global, as well as various executives and employees involved in similar market manipulation activities. These coordinated actions reflect an increasing effort by regulatory and law enforcement agencies to impose accountability within the cryptocurrency industry.

The Justice Departments recent actions underscore an emphasis on pursuing crypto firms engaged in deceptive practices that harm the integrity of financial markets. According to the agency, individuals and entities that mislead investors or distort the true value of crypto assets are likely to face significant legal consequences as authorities continue their push to regulate and monitor the rapidly evolving digital finance sector.