Two years ago, FBI agents posed as the founding team of an "AI and finance intersection" project, launching a token called NexFundAI on Ethereum, complete with a website, whitepaper, and business plan—indistinguishable from any legitimate project in the market.

Then they approached market makers to support trading volume.

One function of market makers is occasionally to artificially inflate trading volume. Industry jargon calls this "volume support"—translated into Chinese, it's known as "volume pumping."

The undercover FBI agents contacted several well-known market makers in the industry, straight to the point: "We have a new project; we need someone to help drive up trading volume."

According to the U.S. Department of Justice’s indictment, each responded with: "Good."

No one questioned whether the project was compliant, no one asked if the token had real utility, no one questioned whether such actions were illegal. According to court documents released by the DOJ, four market makers—Gotbit, ZM Quant, CLS Global, and MyTrade—all took the order.

During a meeting with the undercover agent, the founder of one firm, speaking directly into a recording device, referred to himself as the "mastermind." He detailed how his company used bots to simultaneously place buy and sell orders to fabricate fake trading volume, and how they shaped candlestick charts to resemble roller coasters, enticing retail investors to jump in.

Then he uttered a sentence that FBI agents recorded verbatim. Citing the indictment, Cointelegraph reported:

We must make them lose money so we can profit.

"They" refers to retail investors.

This operation was codenamed Operation Token Mirrors. According to a U.S. Department of Justice announcement on October 9, 2024, the first batch of 18 individuals were charged, and over $25 million in cryptocurrency assets were seized. According to an IRS announcement on March 30 this year, a second group of 10 were charged, including three extradited from Singapore to the United States.

Two years. Three continents. Twenty-eight people. This marks the largest market manipulation enforcement action in crypto history—and it’s not over yet.

A Quotation Sheet

How exactly did these market makers operate?

According to the indictment filed by the U.S. Department of Justice, Andriunin, founder of Gotbit, maintained an internal spreadsheet at his company with two columns side by side—one labeled "Created Volume," the other "Market Volume."

In translation: one column represented fabricated volume created by them, the other real market activity.

In a 2019 interview with CoinDesk while still a sophomore at Moscow State University, Andriunin, then aged 20, calmly explained how he coded algorithms to generate fake volume and helped clients push tokens onto CoinMarketCap’s trending list. According to CoinDesk’s original report, he admitted this business was “not entirely ethical.”

After the interview aired, he received no subpoenas—but instead landed five new clients.

By the time he was arrested in 2024, Gotbit had been operating for six years, serving projects globally. According to DOJ sentencing guidelines, Andriunin was ultimately sentenced to eight months in prison, Gotbit was ordered to dissolve, and approximately $23 million in cryptocurrency assets were confiscated.

Gotbit wasn’t the cheapest option.

According to pricing details disclosed in the indictment from another market maker, generating $1 million in daily trading volume cost roughly $200. Citing court documents, ZM Quant employees told FBI undercover agents on a recorded call: "We use between 1,000 to 2,000 wallets, trading ten times per hour or ten times per minute, to reach our target volume."

Each trade cost about $3.

CLS Global went further. According to SEC investigation files, this UAE-registered company executed 740 fake transactions using just 30 wallets, fabricating nearly $600,000 in fake volume—accounting for 98% of the total trading volume of the fake token NexFundAI during the same period monitored by the FBI.

7.5 Billion Dollars of Air

Market makers are tools—the true architects are those who hire them.

According to the DOJ indictment, the biggest client uncovered in this FBI sting operation was Saitama, a crypto company registered in Massachusetts in 2021, whose peak valuation was claimed to be $7.5 billion.

What does $7.5 billion mean? It surpassed the market cap of many legitimate publicly traded companies on Nasdaq at the time.

But how was this number generated? Starting in July 2021, Saitama’s management coordinated activities via Telegram groups, dispersing small buy orders across multiple wallets to simulate a surge of new buyers.

According to Telegram chat logs cited in the indictment, a core member explained the strategy: "We want these small buy orders to look like more buyers—this is the plan."

The chats also included confirmations of purchases and celebratory “PUMP IT” emojis and animated GIFs when retail investors followed suit.

Per the same indictment, Saitama subsequently hired market makers—including ZM Quant and Gotbit—to conduct large-scale volume pumping on exchanges like BitMart and LBank. Once the token’s market cap was inflated, executives quietly sold their holdings, cashing out tens of millions in dollars. According to DOJ announcements, Saitama’s CEO was arrested in the UK, with five former and current employees also charged, three of whom pled guilty.

Saitama was not alone.

According to the same indictment, another project named Lillian Finance was led by Bradley Beatty, a 48-year-old from Florida. He publicly claimed to be a defense contractor, stated he had spoken before Congress on cryptocurrency issues, and promised part of the token sale proceeds would go to charity for children’s medical care.

According to the indictment, all of these claims were fabricated. Beatty diverted funds meant for charity into his own pockets.

Defense contractor. Congressional speech. Children’s medical charity. All you need is a compelling narrative, paired with a market maker to polish the chart—and you can trigger FOMO in some investors.

Looking back at these cases, what’s most unsettling isn’t how sophisticated the scams were—it’s how crude they actually were.

FBI’s Coins, Quite Legitimate

After the operation concluded, the FBI did something.

According to a DOJ announcement, the NexFundAI website remained live—but now featured a banner at the top reading: "This website was created under the direction of the Federal Bureau of Investigation for the purpose of investigating cryptocurrency fraud and market manipulation." Below the banner was a link to the full indictment.

The FBI also established a dedicated victim registration portal. According to the DOJ’s official statement, anyone who lost money on NexFundAI or related tokens could fill out a form to apply for compensation and legal protection.

The FBI launched a token, disclosed information transparently post-operation, and opened a compensation channel for victims—making their process far more structured than many of the projects now under prosecution.

The most absurd twist came next.

According to a report by blockchain analytics firm TRM Labs, within less than 24 hours of the DOJ announcement, someone cloned the FBI’s NexFundAI smart contract and launched a counterfeit token. Using just around $2,300 in initial capital, this individual cashed out over 52 ETH within 24 hours—valued at approximately $127,000 at the prevailing price at the time.

The FBI used a fake token to expose market maker fraud. Within hours of the news breaking, someone replicated the exact same tactic to create a meme coin and made a profit. Enforcement took two years—but the market digested and absorbed the entire event in just two hours, by issuing a new air coin.

So the next time you see a meme token suddenly skyrocketing, consider: is this performance—or real trading?

Of course, it might even be the FBI.

Original: DeepTide TechFlow