Russian who developed cryptocurrency exchange arrested at FBI’s request

The founder and CEO of cryptocurrency marketplace Gotbit, 26-year-old Russian Alexei Andryunin, was detained in Portugal at the request of the United States. The U.S. Department of Justice accuses him and three other market makers of market manipulation and fictitious trading in cryptocurrency tokens. Andriunin, who is also accused of fraud and money laundering, is awaiting extradition to the United States.

The US Department of Justice has filed the first-ever criminal charges against financial companies for market manipulation and fictitious trading in the cryptocurrency industry. In Boston, charges were filed against the heads of four cryptocurrency companies, four cryptocurrency financial services firms (so-called market makers) and employees of these firms.

Four of the defendants pleaded guilty, and another agreed to plead guilty. This week, authorities detained three more defendants in Texas, the United Kingdom, and Portugal. More than $ 25 million in cryptocurrency was seized, and several trading bots that conducted fictitious trades worth millions of dollars were deactivated.

On the night of October 10, it became known that the head of the cryptocurrency marketplace Gotbit, Alexey Andryunin, was detained in Portugal at the request of the United States.

Gotbit and three other companies — ZM Quant, CLS Global, and MyTrade — provided market-making and liquidity creation services for cryptocurrency tokens in one form or another.

All companies are accused of market manipulation, in particular, fictitious transactions (wash trading) to artificially inflate trading volumes for tokens. Each of the companies mainly worked with low-liquid second-tier crypto assets and memecoins.

According to court documents, Gotbit was a well-known market maker in the crypto business, founded and run by 26-year-old Alexey Andryunin, who holds Russian and Portuguese citizenship. He was detained on October 8 in Portugal and is now awaiting extradition to the United States. Two other Russians from Gotbit were also detained: market creation director Fedor Kedrov and sales director Kavi Jalili.

They are accused of wire fraud and conspiracy to commit market manipulation and fraud.

Andryunin is also charged in a separate criminal case on fraud using electronic means, conspiracy to commit market manipulation and fraud, and conspiracy to commit money laundering.

According to the prosecution, from 2018 to 2024, Gotbit provided market manipulation and fictitious trading services to several cryptocurrency companies, including companies located in the United States. Gotbit allegedly executed millions of dollars worth of fictitious trades on behalf of clients and received tens of millions of dollars in revenue for these illegal services.

In an interview in 2019, Andryunin described how he developed code to fictitiously trade and artificially inflate cryptocurrency trading volume. Andriunin tracked Gotbit’s market manipulation, including through spreadsheets that compared the «created volume» from fictitious trades to natural «market volume.» Gotbit employees, including Jalili and Kedrova, described these fictitious trading tactics to potential clients and how to avoid detection.

«This investigation, the first of its kind, has revealed numerous fraudsters in the cryptocurrency industry. Fraudulent trading has long been prohibited in financial markets, and cryptocurrencies are no exception,» said Acting U.S. Attorney Joshua Levy.

According to him, these are cases «when an innovative technology — cryptocurrency — collides with a century-old scheme — pump and dump.»

«Today's message is this: if you make false statements to deceive investors, it is fraud. Period. Our office will aggressively pursue fraud, including in the cryptocurrency industry,» Levy promised.

To investigate Gotbit and other cryptocurrency companies, the FBI created its own crypto token, NexFundAI, and registered a company of the same name. Under its name, the FBI entered into an agreement to prove the facts of trading volume cheating and market manipulation.

According to FBI Agent Jody Cohen, who participated in the investigation, «The FBI took the unprecedented step of creating its own cryptocurrency token and company to identify, disrupt, and prosecute these alleged fraudsters.»

«What the FBI has uncovered in this case is essentially a new twist on old-school financial crime. Operation Token Mirrors targeted unscrupulous token developers, promoters, and marketers in the crypto space,» said the FBI agent.