The U.S. SEC sues three institutions, accusing them of manipulating the cryptocurrency market

SmartContractAuditor · 2026-02-05T01:13:35+00:00

The U.S. Securities and Exchange Commission (SEC) has filed lawsuits against ZM Quant Investment, Gotbit Consulting, and CLS Global FZC, accusing them of manipulating the crypto asset market through wash trading and other tactics to mislead investors. The cases have been filed in federal court, and the SEC is seeking permanent injunctions and civil penalties, while also increasing oversight of the crypto market.

SmartContractAuditor

2026-02-05 01:13:35

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Odaily Planet Daily News reports that the U.S. Securities and Exchange Commission (SEC) announced that the SEC has filed lawsuits against three entities: ZM Quant Investment, Gotbit Consulting (Gotbit Hedge Fund), and CLS Global FZC, accusing them of impersonating “market makers” and manipulating various cryptocurrency markets through wash trading and other methods to mislead retail investors.

The SEC pointed out that these entities and nine related individuals used algorithms to execute spoofing trades, creating false trading volume and liquidity illusions to induce investors to buy related assets based on false signals. The case has been filed in the Federal Court of Massachusetts, with the SEC seeking permanent injunctions, disgorgement of ill-gotten gains, civil penalties, and bans on executive roles.

The investigation also involved a fake token enforcement operation created by the FBI to reveal related manipulation techniques. The SEC stated that it will continue to strengthen regulatory enforcement against fraud and manipulation in the cryptocurrency markets. (financefeeds)

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