cryptoslate.com
The Department of Justice has indicted Aleksei Andriunin, founder and CEO of crypto financial services firm Gotbit, on charges of wire fraud and conspiracy to commit market manipulation.
Andriunin, a Russian national residing in Portugal, allegedly orchestrated a scheme to artificially inflate trading volumes for client crypto companies, including several based in the US. He was arrested on Oct. 16.
The indictment, filed in the District of Massachusetts, also charges Gotbit and two of its directors, Qawi Jalili and Fedor Kedrov, who were named in a previous indictment unsealed earlier this month.
Prosecutors allege that Gotbit, which marketed itself as a “meme coin market maker,” used “wash trading” techniques from 2018 through 2024 to manipulate market activity, enabling cryptocurrencies to secure listings on platforms like CoinMarketCap and major exchanges.
Memecoins, often based on internet memes, can quickly rise in value but tend to experience sharp declines, a trend that Gotbit allegedly exploited to attract new clients.
Court documents claim that Andriunin developed software specifically designed to carry out wash trades, creating misleading trading activity to deceive investors and exchanges. The indictment also alleges that Gotbit’s employees marketed these services to clients, highlighting their methods for evading detection on public blockchains.
Gotbit reportedly facilitated millions of dollars in wash trades and earned tens of millions from these practices, with Andriunin allegedly transferring significant sums into his personal Binance account.
The charges also highlight Gotbit’s role in targeting memecoin investors through what prosecutors describe as “pump and dump” schemes. These schemes involved inflating a token’s trading volume to draw in investors before selling off holdings at a profit, often leaving investors at a loss.
Prosecutors cited Operation Token Mirrors, a DOJ investigation that involved creating a fake digital token to observe manipulation tactics, as part of the evidence gathered in the case.
If convicted, Andriunin could face up to 20 years in prison for wire fraud, in addition to fines, restitution, and forfeiture. The conspiracy charge carries a maximum sentence of five years. Sentencing would be determined by a federal judge based on the U.S. Sentencing Guidelines.