U.S. authorities have fined MyTrade founder Liu Zhou $10,000 after he pleaded guilty in a cryptocurrency market manipulation case tied to wash trading and wire fraud conspiracy charges. Prosecutors said Zhou used his firm, MyTrade MM, to create artificial trading activity across digital asset exchanges.
According to court records, the scheme involved automated bots that generated fake volume for nearly 60 cryptocurrencies. The activity was later uncovered through an undercover FBI operation, leading investigators to shut down the operation.
Guilty plea and penalty
Authorities said Zhou admitted his role in a scheme built around manipulating crypto market activity. The guilty plea covered conspiracy to commit market manipulation and wire fraud, and the case ended with a $10,000 fine.
The records identify Zhou as a Canadian citizen and Chinese national. Prosecutors said he operated through MyTrade MM, a firm that offered services designed to inflate reported trading volumes on crypto exchanges.
How the trading activity worked
Court filings cited in the case said Zhou acknowledged that MyTrade MM carried out self-trades, describing them as a buy and a sell in the same second. Prosecutors presented that activity as wash trading, a practice used to make trading appear more active than it really is.
Authorities also said the firm relied on automated bots to run the activity at scale. Investigators alleged those bots were used to create fake trading across nearly 60 tokens, giving the appearance of higher market interest and liquidity than actually existed.
Statements in court records
The court records include admissions attributed to Zhou about the nature of the business. In addition to acknowledging self-trading, he said the automated bots also supported pump-and-dump activity, according to the extracted report.
The same records also quote Zhou as saying, “we have to make [the other buyers] lose money in order to make profit.” Those statements formed part of the factual basis describing how prosecutors said the operation functioned.
Company changes ordered in the settlement
As part of the settlement, MyTrade shut down its wash trading bots and ended its “Volume Support” service. Regulators also required the company to tell customers that wash trading violates U.S. law.
Those measures mark the clearest confirmed next step in the case as described in the report. Based on the extracted article, the enforcement outcome included both the fine against Zhou and operational changes at MyTrade intended to stop the conduct identified by investigators.
Source: Coin Edition