CLS Global Admits to Wash Trading Following FBI Probe

According to a press release from the U.S. Attorney’s Office, the company offered financial services related to cryptocurrency to investors in the U.S.

Criminal charges against CLS Global were filed after an undercover law enforcement operation targeting wash trading schemes designed to attract investors. During the investigation, the FBI created a company called NexFundAI and issued a token.

According to the U.S. Department of Justice, CLS Global admitted to agreeing to provide market-making services for the NexFundAI token, which included “wash trading” to fraudulently attract investors to purchase the token.

In several video conferences between July and August 2024, an employee from CLS Global demonstrated how they could help generate trading volume and facilitate NexFundAI token’s listing on exchanges.

A central part of the plan was a self-trading algorithm designed to buy and sell the token between multiple wallets to simulate fake activity.

The employee claimed the algorithm was difficult to track and mentioned that it had been used for multiple clients. They also acknowledged the operation constituted wash trading and admitted that investors would likely not approve of it.

CLS Global’s trading practices violated multiple securities laws, undermining trust in the fairness of cryptocurrency markets. The company’s executives acknowledged their role in the misconduct and have agreed to plead guilty to charges, including conspiracy to commit securities fraud.

If the plea deal receives court approval, CLS Global will face a financial penalty of $428,059, which includes confiscated cryptocurrency assets and a fine. Additionally, the company will be barred from participating in U.S. cryptocurrency markets.