U.S. SEC Sues Three Institutions, Accusing Them of Manipulating the Crypto Asset Market

Odaily News According to an announcement from the U.S. Securities and Exchange Commission (SEC), the SEC has filed lawsuits against three institutions: ZM Quant Investment, Gotbit Consulting (Gotbit Hedge Fund), and CLS Global FZC. They are accused of posing as "market makers" to manipulate the markets of various crypto assets through practices like wash trading, thereby misleading retail investors.

The SEC pointed out that the aforementioned institutions and nine related individuals executed matched orders through algorithms, creating an illusion of false trading volume and liquidity to induce investors to purchase related assets based on misleading signals. The case has been submitted to the Federal Court in Massachusetts, with the SEC seeking permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and officer-and-director bars.

The investigation also involved a law enforcement action using a fake token created by the FBI to reveal the related manipulation tactics. The SEC stated that it will continue to strengthen regulatory enforcement against fraud and manipulation in the crypto asset market. (financefeeds)