In an unprecedented move, the Federal Bureau of Investigation has created its own cryptocurrency in order to combat fraudulent schemes that rely on “pump and dump” methods. These schemes artificially raise the prices of cryptocurrencies to make illegal profits by selling them as soon as the prices increase.
This operation has led to the arrest of 18 individuals involved in widespread manipulation of digital currency markets. These are the first criminal charges against financial companies for “wash trading” and market price manipulation.
The “Token Mirrors” campaign launched by the FBI has resulted in the seizure of over $25 million in digital currencies. They have also disabled trading bots used to conduct fake transactions in over 60 cryptocurrencies. The currency created by the FBI, known as “NexFundAI,” was developed on the Ethereum network and used to monitor suspicious activities of traders.
Reports indicate that “wash trading,” an illegal process of repeatedly buying and selling the same asset to manipulate the market, may involve around 70% of cryptocurrency transactions. These numbers have led authorities to take strict measures to protect the market and investors.
US Attorney Joshua Levy expressed his opinion that these cases show how modern technology like cryptocurrencies can be exploited in traditional market manipulation schemes. At the same time, the Securities and Exchange Commission has issued warnings about the risks of these operations and charged three individuals who were running “side markets” associated with these schemes.
These actions come at a time when digital currency investors are facing a wave of negative news, as electronic crimes related to cryptocurrencies reached record levels in 2024, with an estimated $1.58 billion in stolen funds.
