A 'giant' in the cryptocurrency market-making sector was exposed after being involved in a covert FBI investigation. With the act of wash trading—a common but hard-to-detect form of market manipulation—CLS Global had to pay over $428,000 in fines and is banned from participating in the crypto market in the U.S. for 3 years.



Caught in a 'trap' by the FBI itself


The case originated from a covert campaign by #FBI aimed at dismantling fraudulent trading activities in the crypto market. They created a fake company named NexFundAI and an accompanying token $ETH listed on the DEX Uniswap. The goal was to lure market makers into engaging in wash trading—a form where one party buys and sells the same asset, creating a false sense of lively trading to attract investors.


CLS Global, a market-making company from the United Arab Emirates (UAE), has taken the bait.



Confession and sentencing


In January 2025, #CLSGlobal pleaded guilty in Boston Court to the charges:



  • Market manipulation conspiracy and wire fraud



  • A charge of wire fraud



The company agreed to pay a total fine of $428,059, including the fine and seized crypto, and accepted 3 years of probation during which it is not allowed to participate in the crypto market in the U.S.



Exposing market manipulation behavior


In a series of video calls with authorities (recorded as evidence), a CLS Global employee candidly admitted that they used automated trading algorithms:



"This algorithm essentially performs transactions between different wallets of ours—self-trading to create the illusion that there are real buyers and sellers."



This person also added:



"I know this is wash trading, and I know people won't be happy to hear this."



CLS Global has about 50 employees and specializes in operating in global cryptocurrency markets, including tokens listed and traded by users in the United States.



What is Wash Trading and why is it dangerous?


Wash trading is a form of market manipulation where the buyer and seller are essentially the same party or are related. The main goal is:



  • Increasing virtual trading volume, making tokens/trading pairs appear to be actively traded



  • Creating a false sense of high demand to attract new FOMO investors



  • Unnaturally driving prices up or down, thereby allowing for 'dumping' on unsuspecting crowds




This practice is banned in most traditional financial markets because it distorts the real supply and demand, creating an opaque investment environment.



Worrisome signs: Wash trading algorithms have become sophisticated


The investigation also revealed that CLS Global did not use manual manipulation but implemented specialized trading algorithms to continuously and more sophisticatedly create #washtrading behavior. This made detection harder for regulators and investors.



The case warns the entire market


The CLS Global scandal is not only a shock for this company but also a warning for the entire crypto market, especially for those who are:



  • Investing in newly launched tokens



  • Relying on volume metrics to decide on investments



  • Trusting 'seemingly lively projects' on DEX





Conclusion: The market does not always reflect the truth


As the cryptocurrency market continues to develop and expand globally, transparency becomes a key factor in maintaining investor trust. The CLS Global case shows that even seemingly 'professional' companies can engage in sophisticated and systematic fraudulent behavior.


Don't let the numbers fool you. Always question overly attractive indicators, and dig deeper before investing.



⛔ Risk warning: Investing in the cryptocurrency market always carries high risks, especially with the existence of manipulative behaviors like wash trading. Investors need to be vigilant, cautious, and prioritize transparent platforms with clear audits to protect their assets from hidden risks.