The FBI created a fake cryptocurrency to expose crypto scammers

The Federal Bureau of Investigation (FBI) has developed its own cryptocurrency token, NEXF, to identify companies suspected of manipulating the cryptocurrency market. Yesterday, the US Department of Justice announced the completion of an “undercover operation” and the filing of charges against 18 individuals and companies that used a variety of tactics to artificially inflate the value of cryptocurrencies, including automated bots.

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According to PCMag, the operation was carried out to “catch” the so-called wash trading – illegal transactions carried out to create the appearance of high market activity. Such actions artificially raise the price of an asset, creating the appearance of its attractiveness in the eyes of investors. In reality, this is often part of a “pump and dump” scheme, in which manipulators first inflate the value of an asset and then sell it at an inflated price, leaving uninformed investors with losses.

To identify scammers, the FBI created a fictitious cryptocurrency company, NexFundAI, which developed its own token called NEXF and created a website to attract the attention of potential suspects. As a result of clearly coordinated actions, charges were brought against the companies Gotbit, ZM Quant, CLS Global FZC and MyTrade MM, as well as some of their employees.

As a result, the FBI seized more than $25 million in cryptocurrency and stopped several trading bots responsible for manipulating approximately 60 different types of coins. The CEO of Gotbit was also arrested for his involvement in laundering trading and market manipulation from 2018 to 2024. And the NexFundAI website now posts a message that it was created by the FBI “as part of an investigation into fraud and manipulation in the cryptocurrency market.”