Written by Nate Raymond
BOSTON (Reuters) – A crypto financial services company said on Tuesday it had offered to cooperate in manipulating the market for digital tokens created at the behest of the FBI to help unravel fraud in the crypto space. He agreed to plead guilty to the charges.
CLS Global, registered in the United Arab Emirates, was one of three companies and 15 individuals indicted by federal prosecutors in Boston last year as a result of a new undercover investigation focused on cryptocurrencies. It was.
The investigation, dubbed “Operation Token Mirrors,” for the first time directed the FBI to create its own digital tokens and create a fake cryptocurrency company to help lure and catch fraudsters in the marketplace. I showed that I did it.
A lawyer for CLS did not respond to a request for comment.
The company said it has always taken its compliance obligations seriously and has worked to ensure its operations are separate from the U.S. market and regulatory system.
Prosecutors say CLS was one of three so-called market makers that provided illegal trading services to crypto companies, and that during the sting operation, the FBI-backed market for NexFundAI tokens operating on the Ethereum blockchain was stolen. He said he agreed to cooperate with the operation.
The company acknowledged in court documents that it had agreed to provide services for the NexFundAI token that included fake trades, known as wash trades, intended to artificially inflate the trading volume and price of the asset.
Prosecutors announced Tuesday that CLS will plead guilty to two charges related to manipulating virtual currency trading volumes and pay $428,059.
Prosecutors said the company would also be prohibited from participating in cryptocurrency trading on trading platforms available to U.S. investors or providing services to U.S. cryptocurrency customers.
CLS Global also committed to annual certification of its business practices and agreed to resolve related civil litigation with the U.S. Securities and Exchange Commission.
(Reporting by Nate Raymond in Boston; Editing by Richard Chan)
