Link: The FBI secretly created a coin to investigate crypto pump-and-dump schemes

The FBI launched its own cryptocurrency, NexFundAI, to investigate price manipulation in the crypto markets. This operation led to charges against multiple individuals and entities for fraudulent activities.

The government disclosed that NexFundAI, an Ethereum-based token, was devised with assistance from cooperating witnesses. The Securities and Exchange Commission has charged 12 people so far.

These charges stem from alleged schemes aimed at inflating the prices of certain cryptocurrencies. Accusations include making false claims and performing fake transactions to simulate market activity.

The market makers involved, ZMQuant, CLS Global, and MyTrade, were unaware that NexFundAI was an FBI creation. They reportedly engaged in "wash trading" to manipulate its prices unintentionally.

FBI Special Agent Jodi Cohen highlighted that this scenario mirrored traditional financial crimes within a modern crypto framework. Meanwhile, the DOJ has recovered $25 million in fraudulent proceeds, promising to return them to investors.

An FBI spokesperson noted minimal trading of NexFundAI and disabled further transactions. These developments were confirmed during a press call by Acting US Attorney Joshua Levy. #

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Yoooo, this is a quick note on a link that made me go, WTF? Find all past links here.