CLS Global Admits to Wash Trading on Uniswap after FBI Probe | Coinspeaker
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CLS Global Admits to Wash Trading on Uniswap after FBI Probe

The US Securities and Exchange Commission (SEC) has also started a civil case against CLS Global for violating securities laws.

Mayowa Adebajo By Mayowa Adebajo Julia Sakovich Edited by Julia Sakovich Updated 2 mins read
CLS Global Admits to Wash Trading on Uniswap after FBI Probe
Photo: CLS GLOBAL / X

Key Notes

  • CLS Global has admitted the use of algorithms to manipulate trading volumes.
  • The firm faces a $428,059 fine and a permanent ban from the US crypto markets.

Dubai-based crypto firm CLS Global has admitted to wash trading on the decentralized trading platform Uniswap. The US prosecutors for the District of Massachusetts made an announcement, confirming that the crypto market maker will be pleading guilty to the charges leveled against it that border on fraudulent manipulation of cryptocurrency trading volume.

FBI’s Undercover Operation Reveals Illegal Practices on CLS Global

It might be worth noting that CLS Global’s admission did not happen without any reason. The FBI moved forward with overwhelming indicators of the illegal practices being perpetrated on the platform. The investigation began mid-last year when the FBI launched NexFundAI, an Ethereum-based token, on Uniswap. With the make-believe project, authorities were able to gather undeniable evidence of CLS Global’s involvement in wash trading, a deceptive way of creating illusional trading activity to mislead investors about an asset’s true demand.

Between July and August 2024, CLS Global employees held video conferences with undercover agents posing as NexFundAI representatives. In one of these meetings, prosecutors said that a CLS employee admitted that the company could help with volume generation so that NexFundAI could meet cryptocurrency exchange listing requirements and attract purchasers of the NexFundAI token.

By September, authorities had enough evidence to indict CLS Global. That is, for one count of conspiracy to commit market manipulation and wire fraud and one count of wire fraud.

Penalties and Market Ban

Going by Tuesday’s announcement, though, CLS has now agreed to plead guilty. The plea deal will see the company pay a sum total of $428,059 to the government. This amount includes cryptocurrency seized from the platform and a penalty.

Also, CLS Global will henceforth not be allowed to participate in the US crypto markets. However, it might be worth noting that the guilty plea in its entirety is still subject to court approval, according to the official statement.

On the side, the US Securities and Exchange Commission (SEC) has also started a civil case against CLS Global for violating securities laws.

Either way, it appears that authorities are winning, more so, in their efforts to protect investors and clamp down on questionable practices within the crypto market.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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Mayowa Adebajo

Mayowa is a crypto enthusiast/writer whose conversational character is quite evident in his style of writing. He strongly believes in the potential of digital assets and takes every opportunity to reiterate this. He's a reader, a researcher, an astute speaker, and also a budding entrepreneur. Away from crypto however, Mayowa's fancied distractions include soccer or discussing world politics.

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