Crypto Founder Gets 8 Months Behind Bars for Wash Trading Scheme—A Cautionary Tale for Digital Asset Markets

Another crypto bigwig falls to regulators'' hammers—this time for artificially inflating trading volumes. The founder''s 8-month sentence sends shockwaves through DeFi circles, proving even in the wild west of finance, the sheriff still rides.

Wash trading—the age-old market manipulation tactic—just got a blockchain makeover. And the SEC wasn''t laughing. While some traders treat crypto markets like their personal casino, this verdict shows regulators are finally stacking the deck in their favor.

Bonus jab: At least this founder''s token didn''t pull a 99% rug pull—just good old-fashioned securities fraud. Progress?

Gotbit Founder Sentenced to Prison

Gotbit, an influential market maker, established its reputation with meme coins like Saitama and Robo Inu. The platform used wash trading to artificially boost the token’s liquidity.

However, the FBI employed fake tokens to catch the firm in the act last October, leading to a major sting operation. Today, Gotbit founder Aleksei Andriunin was sentenced to prison, ending a chapter in the saga.

As a result of an #FBI Boston investigation, Gotbit Consulting, a financial services firm known in the crypto industry as a “market maker,” & its founder Aleksei Andriunin, of Russia & Portugal, were sentenced for market manipulation & fraud conspiracy. https://t.co/CNpz0BD4aE pic.twitter.com/jIFg1Z3nt6

After the Gotbit founder was extradited to the US in February, he entered a plea deal that significantly impacted his sentence. Andriunin detailed his company’s wash trading operations to federal prosecutors and may have cooperated in other ways.

As a result, his punishment is only eight months in prison plus five years of probation and substantial asset forfeiture.

The FBI also indicted Fedor Kedrov and Qawi Jalili, two other executives, but they still remain at large. Regardless, the FBI has its eye on the platform and intends to ensure Gotbit “ceases to exist or operate” altogether.

Generally, the community responded positively to the sentencing, as the firm’s actions could compromise market confidence. Neiro, a popular meme coin, had some early ties with the market Maker but cut the firm off completely shortly after.

All that is to say, market fraudsters can damage legitimate projects’ reputations, creating scandals that weigh down their potential success. Now that Gotbit’s founder has been sentenced, the community can rest a little easier.