CLS Global has agreed to plead guilty to charges of fraudulent market manipulation and wire fraud following an undercover operation led by the U.S.’s Federal Bureau of Investigation (FBI).
According to a plea deal announced on January 21, the United Arab Emirates-based crypto trading firm admitted to aiding in the manipulation of trading volumes for NexFundAI (NEXF), a fake crypto token created by the FBI to target fraudsters in the cryptocurrency market. The token was designed to lure individuals involved in pump-and-dump schemes and other fraudulent activities by simulating an AI-driven investment platform.
The FBI accused CLS Global of engaging in wash trading—artificially inflating trading volumes to create a false impression of market demand—to deceive investors into believing that NEXF was highly popular. The firm’s role in the scheme was uncovered in September 2024, leading to criminal charges.
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As part of the plea deal, CLS Global agreed to pay a $428,059 fine and forfeit funds held in several accounts on the Binance and KuCoin crypto exchanges. Additionally, the firm is barred from participating in any cryptocurrency transactions on platforms accessible to U.S.-based investors and will be under probation for three years. It is also required to submit annual compliance certifications to the U.S. Securities and Exchange Commission.
The SEC had separately charged CLS Global in October 2024 for violating securities laws. The agency reached its own resolution with the firm, allowing funds seized by or paid to either authority to be credited across both settlements.
The FBI operation, which involved the creation of NexFundAI and a fictitious cryptocurrency company, marked a groundbreaking effort to combat fraud in the digital asset market. Prosecutors revealed that CLS was one of 18 individuals and 2 companies implicated in the broader case. Another firm, MyTrade MM, is also alleged to have provided services for the NEXF token.
In another recent case of regulatory enforcement in the financial sector, Robinhood agreed to a $45 million settlement with the U.S. SEC over multiple securities law violations. The settlement, announced on January 13, implicated Robinhood’s broker-dealer subsidiaries, Robinhood Securities LLC and Robinhood Financial LLC.
According to the SEC, the firms failed to comply with key regulatory obligations, including reporting trading activity inaccurately, neglecting short sale rules, delaying suspicious activity reports, and failing to maintain accurate books and records. Additionally, the subsidiaries were cited for inadequate safeguards for customer information.
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