DOJ Charges 10 in Alleged Crypto Pump-and-Dump Operation Tied to Market-Making Firms

The U.S. Department of Justice has charged ten executives and employees at four crypto market-making firms over alleged schemes to artificially boost trading volume and token prices. In a statement released Monday, the DOJ said the defendants are affiliated with Gotbit, Vortex, Antier and Contrarian. Three people were arrested in Singapore, extradited to the United States and made their first court appearance Monday before a federal judge in Oakland. The DOJ said two of those extradited were CEOs. The case stems from an undercover operation led by the FBI and the IRS Criminal Investigation division that began in May 2024 and focused on wash trading. According to prosecutors, the FBI created crypto tokens and observed the firms allegedly coordinating trades that produced fabricated volume and sharp price moves. Wash trading refers to transactions that amount to a party trading with itself to manufacture the appearance of liquidity, a tactic often used as a foundation for pump-and-dump manipulation. Prosecutors said the defendants face three separate indictments. The DOJ alleges the group worked to inflate volume and prices and then sold tokens at elevated levels to unsuspecting investors, causing losses that extended beyond the United States. Separately, the DOJ said two co-defendants have already pleaded guilty and were sentenced by U.S. District Court Judge Araceli Martínez-Olguín. Authorities have seized more than $1 million in cryptocurrency to date. The DOJ has pursued similar cases before. In October 2024, federal prosecutors in Boston charged 18 individuals and entities in a broad cryptocurrency market manipulation case that included leaders of four crypto companies, four market makers—ZM Quant, CLS Global, MyTrade and Gotbit—and employees at those firms. For traders, the latest charges reinforce that fabricated volume and manufactured liquidity in altcoin markets are being treated as classic fraud rather than as a byproduct of a new asset class. Elevated on-chain or exchange volume in thinly traded tokens is an increasing red flag, especially when linked to lightly documented market-making arrangements. The investigation also points to the likelihood of additional enforcement actions, which could raise legal-risk premia for small-cap tokens, intensify scrutiny on market makers, and result in cleaner but thinner liquidity in the near term. Over time, a sustained crackdown could compress the highest-volatility segment of crypto markets while compliant venues and assets benefit from improved credibility. At the time of writing, Bitcoin was trading in the upper $68,000s.