TL;DR
- MyTrade and its founder Liu Zhou faced charges of market manipulation and wire fraud after operating a large-scale wash trading service.
- Zhou was sentenced without prison time and fined $10,000, after pleading guilty in October 2024 along with 17 co-defendants.
- The FBI created a fictitious token on Ethereum called NexFundAI to infiltrate the operation and document in detail the services offered.
Liu Zhou, founder of MyTrade, avoided prison after being sentenced by federal judge Angel Kelley in a federal court in Boston. The penalty consisted solely of a $10,000 fine, with no prison time, as reported by Law360.
Zhou, 41, a Canadian citizen of Chinese nationality, had pleaded guilty in October 2024 to conspiracy to commit market manipulation and wire fraud, as part of a case that involved 17 individuals and entities.
MyTrade Operated Its Service Openly
The company marketed its scheme without concealment. Through a panel on the MyTrade MM website, clients could specify how many wash trading operations they wanted executed daily on designated exchanges — a product the firm called “Volume Support“. Automated bots bought and sold the same asset repeatedly to inflate the apparent volume of up to 60 different cryptocurrencies. At the time of the arrests, the service had dozens of active clients.
Zhou was explicit in his conversations with those he believed were potential clients. He explained that the platform executed self-trades — a buy and a sell in the same second — and that the volume bot could be used for pump and dump schemes. The goal was to attract outside buyers to the community to “make them lose money and thus generate profits,” according to records from the Department of Justice.
The FBI Trap: a Fictitious Token on Ethereum
To document the scheme, the FBI created NexFundAI, a fictitious crypto company with its own website and an Ethereum-based token that operated on Uniswap until authorities shut it down. The undercover operation led to charges against 18 individuals and entities in October 2024, among them market makers Gotbit, ZM Quant, and CLS Global.
Zhou’s guilty plea required MyTrade MM to cease the sale of Volume Support and permanently deactivate the associated bots. Additionally, the firm was required to publish a notice on its own website acknowledging that volume support “is a form of wash trading and illegal under the laws of the United States“.
