CLS Global Fined & Put on Probation for 3 Years Over Wash Trading

Massachusetts has continued to hit crypto firms functioning without a proper registration and approval in a recent development, a regional court has imposed a fine on CLS Global. It is worth noting that the firm has been facing allegations of wash trading of around $420km

As per the announcement from the attorney’s office of Massachusetts, a federal court has identified CLS Global as manipulating the trading volume. There are speculations that behind this wash trading, the company has carried out massive transactions illegally

The court imposed a probation period of three years

According to the court documents, CLS Global is penalized with an amount of $428,059 and has also had its operations of the company suspended for a probation period of three years

CLS Global is listed under the regulators in the United Arab Emirates and is now facing one count of wire fraud and one count of market manipulation.

It is worth noting that the FBI has trapped CLS Global by forming a NexFundAI token as part of its sting operation. Earlier this year, the Securities and Exchange Commission of the United States accused CLS and its employees of charges of fraud

In simple terms, wash trading is a practice of market manipulation in which individual traders buy and sell any crypto or asset at the same time to show manipulated volume without changing their position.

Crucial to note that the losses from wash trading and similar activities in crypto market remains at peak and in many cases traders have also inflated the trading volume with an intention to hit investors with losses in millions.

Major type of fraud-committing techniques in crypto

Some primary types of scams and frauds include phishing, rug pull, Ponzi schemes, investment scams, and romance scams. Like pig butchering, online scams, smart contract breaches, and bridge breaches are becoming common nowadays.

Wash trading is closely linked with pump and dump schemes, as these types of scams also involve price manipulation and further gaining funds from innocent investors.

With the growing crypto adoption worldwide, scams of the initial coin offering category has peaked and in the time frame number of launched products has reached to a new height.

This changing trend has called out a severe need for rules and regulations for the crypto market, through which users and investors should be kept safe.

Most recently Lazarus Group based in North Korea has swapped Wrapped Bitcoin valued in million and made $2.1 million in profit with also buying around 1822 Ethereum.