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An eye for an eye. A fraud for a fraud.
The FBI has taken a genius step in tracking suspected fraudsters by creating an Ethereum-based cryptocurrency called NextFundAI to track illegal practices by tricking scammers into engaging with it—which led to the arrest of 18 individuals in the USA, UK, and Portugal, as announced by the Department of Justice on Wednesday, October 9.
“The FBI took the unprecedented step of creating its very own cryptocurrency token and company to identify, disrupt, and bring these alleged fraudsters to justice,” said Jodi Cohen, Special Agent in Charge of the FBI Boston Division.
The suspects were charged with market manipulation, including company members of Saitama, for the fraudulent schemes and for creating a false market to manipulate prices. They used “pump and dump” tactics and false promises to investors, with Saitama’s leadership allegedly making millions by secretly selling their tokens.
“What the FBI uncovered in this case is essentially a new twist to old-school financial crime,” Cohen further commented.
Four of the defendants have already pleaded guilty. Moreover, the US Securities and Exchange Commission (SEC) has also brought charges against five “crypto asset promoters” for misleading investors.
“Today’s enforcement actions demonstrate, once more, that retail investors are being victimized by fraudulent activity by institutional actors in the markets for crypto assets,” Sanjay Wadhwa, SEC Deputy Director of Enforcement, said.
