SEC Launches Major Charges Against Crypto Market Makers
The U.S. Securities and Exchange Commission (SEC) has filed major charges against three crypto market makers — ZM Quant, Gotbit, and CLS Global — for allegedly using algorithms to generate fake trading volumes and mislead retail investors.
The investigation was led by the SEC in coordination with the FBI, which created a fake token called NexFundAI to gather evidence, exposing the willingness of these firms to engage in deceptive practices.
Nine Individuals Also Sued, Trust in Market Shaken
In addition to the three companies, the SEC has also filed lawsuits against nine individuals, including employees and promoters. They are accused of participating in market manipulation and executing meaningless trades that violated anti-fraud and registration provisions of securities laws.
- Automated strategies used to simulate false liquidity
- Some staff helped promote and cover up illegal activities
- Regulators stress commitment to market integrity
Regulatory Pressure Rises, Compliance Becomes Critical
The case has sparked widespread attention, leading to charges against 15 entities and triggering parallel criminal proceedings. It underscores the regulator's focus on transparency in the crypto industry and signals a future with stricter compliance standards.