TLDR
- The linchpin of Gotbit, Andriunin, makes a move to relinquish $23 million in digital currency to settle market manipulation claims.
- The arrangement might spare him prison but would put him under three years of intense watch, cutting him off from the crypto scene.
- Andriunin faced a hefty sentence — up to two decades — due to allegations of wire fraud and market manipulation.
- Between 2018 and 2024, Gotbit was accused of distorting the market using misleading trades to hype up token values.
- Gotbit was among the pioneering crypto firms indicted in a ground-breaking U.S. legal battle against crypto market manipulation.
In a notable twist for the crypto world, Aleksei Andriunin of Gotbit reaches an accord with U.S. regulators, agreeing to hand over significant crypto assets to avoid severe punishment for market manipulation and fraud — charges serious enough to put him behind bars for years.
Andriunin found himself in U.S. custody after being extradited post-arrest in Portugal, linked to Gotbit's activities accused of bumping token prices artificially, involving several crypto ventures, including some on American soil.
Reports from Law360 cite how Andriunin's maneuvers with Gotbit financially impacted unsuspecting investors who bought crypto at falsified high prices, marking this case as a pivotal enforcement action against crypto market trickery.
The plea agreement Details spell out a compromise sparing Andriunin prison time, trading it instead for supervised freedom with strict conditions barring crypto involvement.
He's losing $23 million, including holdings in stablecoins like Tether and Circle, hidden in four separate crypto wallets exclusively under his command.
Exploring Gotbit's deceptive trading techniques.
He’s compelled to hand over close to $14 million Tether hoarded across two crypto wallet addresses, and an additional $9 million held in USDC across two more wallets.
Legal documents reveal that despite these funds being under Gotbit Consulting LLC, they were ultimately managed solely by Andriunin. The U.S. Attorney’s Office remarks, “The defendant pledges full cooperation in transferring the assets to U.S. control.”
Federal officers outline how Gotbit primarily peddled fake trades to simulate high trading activity. These wash trades basically meant buying and selling the same asset to artificially amplify trading volumes, fooling other market competitors.
A separate SEC complaint against Gotbit and its marketing director Fedor Kedrov displayed claims of comprehensive record-keeping, allegedly comparing fake trading volumes against natural market actions.
The indictment reveals efforts by Gotbit to lure clients by claiming their services could camouflage activities on public blockchain platforms, pointing to deliberate attempts to skew perceptions of trading volumes and market fluidity.
Curiously, Andriunin, in a 2019 interview later surfaced by the Justice Department, admitted Gotbit’s operations weren't “entirely ethical.” This confession possibly added fuel to the prosecution’s strategy.
In October 2023, Gotbit was among four firms identified by U.S. prosecutors in an inaugural charge against crypto market manipulation — earlier joined by ZM Quant, CLS Global, and MyTrade.
In total, over $25 million worth of cryptocurrency has been seized in the broader investigation. Law enforcers even created bogus digital assets to catch those allegedly exploiting market dynamics, showcasing their advanced investigational approaches.
With charges filed, various meme coin projects using Gotbit’s liquidity services have distanced themselves, severing ties and issuing disassociating statements to mitigate effects, rippling across the crypto scene.
The plea pact awaits judicial endorsement, its terms offering no prison time and no further penalties barring the forfeiture. However, the final sentence lies with the court.
Prosecutors have presented steep potential penalties for the market manipulation and wire charge claims, suggesting fines up to $500,000 or doubled based on the wrongful gains or losses, alongside possible mandatory compensation and probation terms up to five years.
The plea letter elaborates an arrangement communicated to the court and defense, allowing withdrawal if any plea components are dismissed by the bench.
