TechFlow news, April 4 — According to Cointelegraph, a federal court in Boston, Massachusetts imposed a $428,000 penalty on April 2 against UAE-based cryptocurrency market maker CLS Global for its involvement in artificially inflating cryptocurrency trading volumes. The company is also banned from providing services in the United States for the next three years.
As disclosed by the Massachusetts U.S. Attorney's Office, CLS Global previously pleaded guilty to one count of conspiracy to manipulate markets and one count of wire fraud. The case stems from an undercover operation launched by the FBI in May 2024 involving a specially created "honeypot token" called NexFundAI.
CLS Global is one of at least three companies that fell into the FBI’s trap, alongside Hong Kong-linked ZM Quant Investment and Russia-linked Gotbit Consulting. All three agreed to provide "market-making services" for NexFundAI as part of a fraudulent scheme designed to lure investors into purchasing the token.
Notably, according to a January 2025 report by blockchain analytics firm Chainalysis, approximately $2.6 billion worth of daily cryptocurrency trading volume is estimated to be fake, accounting for around 2% of the total daily trading volume reported by CoinGecko.
