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  • UAE-based CLS Global admits to using automated algorithms for wash trading, creating millions in fake trading volume on Uniswap.
  • Following an FBI sting operation, CLS Global faces penalties exceeding $428,000 and permanent exclusion from U.S. crypto markets.

A UAE-based crypto market maker, CLS Global, has admitted to orchestrating a sophisticated wash trading scheme, deceiving U.S. investors by generating millions in fake trading volume through automated self-dealing on Uniswap. The revelation comes as federal prosecutors in Boston announced that the company is set to plead guilty to charges of market manipulation and wire fraud.

The charges follow “Operation Token Mirrors,” an FBI-led sting operation launched in October 2023 to identify fraudulent activities in the crypto industry. As part of the investigation, federal authorities created a fake cryptocurrency, NexfundAI, and collaborated with undercover agents to expose CLS Global and two other firms involved in similar activities.

Prosecutors allege CLS Global used advanced algorithm ms to create artificial trading volumes, manipulating the perceived market activity of crypto assets. An SEC complaint revealed that between August 23 and September 18, 2024, the firm’s automated systems inflated NexfundAI’s trading volume by $595,000, accounting for 98% of its total activity on Uniswap.

Under a plea agreement, CLS Global will pay over $428,000 in penalties and forfeited assets. The company will also face permanent exclusion from U.S. crypto markets and must submit annual compliance certifications.

The case marks a significant milestone as one of the first criminal prosecutions targeting market manipulation and wash trading within the crypto sector. Prosecutors highlighted recorded video meetings where CLS Global employees openly discussed their “volume generation” algorithms, with one employee admitting, “I know that it’s wash trading, and I know people might not be happy about it.”

Since its establishment in 2017, CLS Global has portrayed itself as a legitimate market maker, claiming partnerships with prominent centralized exchanges such as Binance, Bybit, and KuCoin. However, investigators found no evidence of these platforms being involved in the fraudulent scheme, which operated solely on Uniswap.

Uniswap, the decentralized exchange used in the operation, has not stated the case.


Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by Harshajit Sarmah.

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