A crypto trading firm that pleaded guilty to criminal charges after being caught in an FBI sting targeting alleged wash trading in the crypto sector has been sentenced to probation and fined in a U.S. federal court.
In January, the UAE-based firm, CLS Global FZC LLC, pleaded guilty to wire fraud and conspiracy charges for manipulative crypto trading activity.
The firm was charged following an undercover operation targeting wash trading in the crypto sector, which saw U.S. authorities create a crypto company, NexFundAI, that launched its own Ethereum-based token.
“CLS Global agreed to provide market making services for the NexFundAI token that included ‘wash trading’ to fraudulently attract investors to purchase the token,” according to the U.S. attorney’s office for the District of Massachusetts.
The firm’s traders then bought and sold the token using CLS Global’s trading wallets.
Now, in a federal court in Boston, the firm has been sentenced to three years of probation, which includes a ban on participating in the U.S. crypto markets.
“As part of its sentence, CLS Global is prohibited from participating in cryptocurrency transactions on trading platforms available to investors located in the U.S. or providing services to cryptocurrency clients based in the U.S.,” the U.S. attorney’s office said, adding that the firm is required to annually certify its compliance with these prohibitions.
It was also ordered to pay US$428,059 comprised of both a criminal fine and seized crypto.
Separately, the U.S. Securities and Exchange Commission (SEC) also settled a related civil enforcement action against CLS Global, the U.S. attorney’s office said.