MyTrade founder fined $10K over crypto wash trading

MyTrade founder Liu Zhou was fined $10,000 after admitting that his crypto market-making platform used bots to conduct wash trades for dozens of tokens. Summary Liu Zhou pleaded guilty to conspiracy to commit market manipulation and wire fraud. MyTrade bots generated millions of dollars in daily wash trades for about 60 cryptocurrencies. An FBI operation used the NexFundAI token to expose MyTrade’s market-manipulation services. MyTrade has shut down its wash-trading bots and acknowledged that its “Volume Support” service was illegal. MyTrade founder receives $10,000 fine A federal court in Boston ordered Liu Zhou, the founder and primary operator of crypto market maker MyTrade, to pay a $10,000 fine for his role in a market-manipulation conspiracy. U.S. District Judge Angel Kelley imposed the sentence, according to the Department of Justice. Zhou, 41, is a Canadian citizen and Chinese national. Federal prosecutors charged Zhou alongside 17 alleged co-conspirators in October 2024. He pleaded guilty to conspiracy to commit market manipulation and wire fraud. You might also like: SEC delays decision on Solana ETF applications citing market manipulation concerns MyTrade provided market-making services through its MyTrade MM website and application. Its products included a feature called “Volume Support,” which allowed crypto projects to select how much artificial daily trading activity they wanted across specified exchanges. The platform then used automated bots to repeatedly buy and sell the same cryptocurrencies. Those transactions created the appearance of greater trading volume and market interest without serving a legitimate commercial purpose. FBI token exposed MyTrade’s wash-trading service U.S. authorities identified the scheme through an undercover operation involving NexFundAI, a fake crypto company created by law enforcement. Investigators launched a website and an Ethereum-based NexFundAI token, which traded on the decentralized exchange Uniswap before authorities disabled it. Undercover agents approached market makers while posing as the project’s promoters. During discussions with the purported NexFundAI team, Zhou explained that MyTrade conducted simultaneous purchases and sales of the same asset. “MyTrade MM does self-trades — a buy and a sell in the same second,” Zhou said, according to prosecutors. He also said the company’s volume bot could execute “pump and dumps.” In another statement cited by the DOJ, Zhou said the objective was to attract outside buyers because “we have to make [the other buyers] lose money in order to make profit.” MyTrade was still providing its Volume Support service to dozens of clients as of Oct. 1, 2024, the DOJ said. Bots supported about 60 cryptocurrencies As part of Zhou’s guilty plea, MyTrade agreed to stop offering Volume Support and permanently deactivate the bots used to create the artificial transactions. Prosecutors said the bots had generated millions of dollars in daily wash trades involving approximately 60 cryptocurrencies.