Aiming to curtail market manipulation and misconduct, the SEC charges 9 phony market makers and crooked promoters with fraud and warns, "Crypto market investors should be mindful that the deck may be stacked against them"

The SEC filed fraud charges against three companies that claimed to be market makers—ZM Quant, Gotbit, and CLS Global—and nine individuals in what it described as a scheme to manipulate trading in crypto assets that were offered and sold as securities to retail investors. According to the SEC, promoters hired these firms to create the false appearance of active trading, including by generating artificial volume and using wash trading and bots that produced huge numbers of sham transactions. The defendants named in the complaints include promoters Russell Armand, Maxwell Hernandez, Manpreet Singh Kohli, Nam Tran, and Vy Pham, along with firm employees Baijun Ou, Ruiqi Lau, Fedor Kedrov, and Andrey Zhorzhes. The SEC said the alleged conduct violated antifraud and market-manipulation provisions, and it sought injunctions, disgorgement, interest, civil penalties, and, for some defendants, officer-and-director bars; Armand, Hernandez, and Pham agreed to settlements subject to court approval. The case matters because it targets market structure abuses that can mislead retail buyers into thinking a token has real liquidity or demand when the activity is manufactured.

✨ AI-generated background, compiled from web sources — not editorial content.

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• Crypto
• Manipulation
• Crypto Market Structure Bill
• SEC