How Three Outsmarted Twenty-Two in the FBI’s Counterfeit Token Operation

GM. Your daily dose of crypto juice is here—pressed fresh from the market’s latest moves, just the kick you need to stay ahead.

🚓 The FBI, DOJ and SEC charged four crypto market makers and 18 associated individuals with fraud and market manipulation.

🍊 News drops: the Trump fam’s DeFi project wants to launch its own Aave v3 instance, ZachXBT found crypto wallets belonging to memecoin enthusiast Murad Mahmudov + more

🍍 Market flavor today

Crypto Market Cap $2.18 Trillion -1.30% (24H)

Name
Price
24H %
7D %

Bitcoin BTC
$61,356.34
-1.16%
0.93%

Ethereum ETH
$2,407.90
-0.88%
2.21%

BNB BNB
$572.45
-1.83%
5.76%

Solana SOL
$139.91
-2.13%
1.68%

The crypto rollercoaster just took another dip: Fear and Greed dropped to 39, sliding us into the “Fear” zone, and it’s red across the board today.

What’s causing the panic? The market’s reacting to news that Chinese authorities might dump crypto seized from PlusToken, a massive Ponzi scheme. They’ve got over $4.2B in crypto, and about 7K ETH (part of a 524K ETH stash) just moved to exchanges, signaling more could be on the way. Rumor has it that 150K BTC has already been sold in the past, but no one knows if that was the full amount.

And that’s not all—September’s inflation numbers came in higher than expected, typically hinting at interest rate hikes, which isn’t good for crypto. On the flip side, jobless claims hit their highest since August 2023, which might push the Fed to ease up and possibly lower rates to support the labor market. So, a rate cut at the next meeting is still on the table, but we’re likely looking at 25bps, not 50bps.

But as always, expect the unexpected—after all, it’s never a dull moment in this industry. 🎢

🚓 FBI, SEC & DOJ! Open up!

When three take on 22 in the streets, it’s usually a dumb move—well, unless those three are Floyd Mayweather, Mike Tyson, and Sugar Ray Leonard. In that case, good luck to the 22.

But in today’s story, there ain’t no boxers, yet somehow, three still managed to beat up 22. The three? The FBI, SEC, and DOJ. The 22? Four crypto market makers—Gotbit Consulting, ZM Quant, CLS Global, and MyTrade—and 18 people associated with them. The knockout? Charges of fraud and market manipulation.

As for how we came to this point—let’s just say they liked to keep things clean, doing something called wash trading. Here’s how that works:

Step 1: A trader (or a company) buys and sells a token Sonic style—so fast that the trades pretty much cancel each other out, but the trading volume still goes up.

Step 2: Other traders notice this token, see its trading volume, and think it’s the hottest thing rn.

Step 3: FOMO kicks in, so the traders buy the token, pumping its price.

Step 4: The original trader sells at a higher price.

Step 5: Profit.

Sounds like a smart hustle? Think again. Try it, and the next thing you’re gonna be washing is prison laundry—’cause it’s illegal af.

The market makers used this strategy to boost prices on seven tokens: Saitama, SaitaRealty, SaitaChain, Robo Inu, VZZN, Lillian Finance, and NexFund AI. Looks like your typical list of irrelevant tokens, ranked so low you’d pass through two generations by the time you found them… except one of them is slightly different.

Turns out, as part of their investigation, the FBI created a whole fake crypto company, NexFund AI, with its own token. They asked the market makers to manipulate the token price, and the fools went for it.

So, what can we all learn from this story? Stay cautious of sus tokens, and don’t get into dirty schemes—unless you wanna be scrubbing the dirt off that orange jumpsuit.

📰 News drops

🚀 Trump-backed DeFi project, World Liberty Financial, is aiming to launch its own Aave v3 instance. They’ve pitched the idea to AaveDAO, offering 20% of the platform’s fees and 7% of the total WLFI token supply.

🔍 ZachXBT claims he’s uncovered 11 Ethereum and Solana wallets belonging to memecoin enthusiast Murad Mahmudov, packed with over $24M in tokens. He exposed these wallets so the crypto community can keep an eye on what Mahmudov does next.

💍 Coinbase CEO Brian Armstrong got married to his longtime partner, Angela Meng. Big congrats to the happy couple!

🗑️ OpenAI is trying to get Elon Musk’s lawsuit thrown out, saying it’s just another one of his stunts to harass them. They claim he’s doing it to boost his own AI company, xAI.

🏦 Ripple has launched digital asset storage services for banks and fintech companies. It’s part of Ripple’s new focus on custody.

🇹🇭 Thailand’s SEC is suggesting new rules to let mutual and private funds invest in digital assets. They’ve put out a draft for public feedback on changes to the criteria of the funds.

🤓 Knowledge juice

Learn about Binance spot trading with the latest BitDegree Mission, “Mastering Binance Spot Trading”:

🍌 Juicy memes