Authorities in Massachusetts are intensifying their crackdown on fraudulent cryptocurrency market activities. In the latest move, a federal court in Boston has fined crypto financial services firm CLS Global for manipulating trading volume.
According to an announcement from the Massachusetts US Attorney’s Office, the court issued a ruling on April 2, sentencing CLS Global on criminal charges related to market manipulation. The company has been ordered to pay a $428,059 fine and is banned from offering services in the US for three years.
CLS Global Admits to Market Manipulation
CLS Global, a crypto market maker registered in the United Arab Emirates, pleaded guilty to conspiracy to commit market manipulation and wire fraud in January. The charges stemmed from an undercover operation involving a fake token created by the FBI.
FBI’s “Trap Token” NexFundAI Exposes Fraud
The case against CLS Global was part of a sting operation conducted by US law enforcement in May 2024. The FBI created NexFundAI, a fraudulent token designed to lure bad actors into market manipulation schemes. CLS Global took the bait, agreeing to provide market-making services that included artificially inflating trading activity to deceive investors.
At least two other firms also fell for the trap. In October 2024, the Securities and Exchange Commission (SEC) announced fraud charges against CLS Global and its employee, Andrey Zhorzhes. The SEC also targeted Hong Kong-based ZM Quant Investment and Russia-linked Gotbit Consulting for their roles in the scheme.
CLS Global’s Leadership and Industry Ties
Founded in 2017, CLS Global positioned itself as a provider of “high-quality market-making solutions and trading consulting.” The company’s CEO, Filipp Veselov, previously worked at the Russian cryptocurrency exchange Latoken, a platform boasting around 370,000 followers on X.
The firm’s chief revenue officer, Pavel Singaevskii, also has a history in the crypto space. Before joining CLS, he served as a sales manager at Stex, a crypto exchange that reportedly shut down without warning in 2023.
