Crypto Market Maker Founder Sentenced in U.S. Wash Trading Fraud Case

The founder of cryptocurrency market-making firm MyTrade has been sentenced in the United States for his role in a conspiracy to manipulate cryptocurrency markets through fraudulent wash trading services.

According to the U.S. Attorney's Office for the District of Massachusetts, Liu Zhou, a 41-year-old Canadian citizen and Chinese national, was ordered to pay a $10,000 fine after pleading guilty in October 2024 to conspiracy to commit market manipulation and wire fraud. Zhou had been charged alongside 17 co-conspirators in a sweeping federal crackdown on crypto market manipulation.

Authorities said MyTrade, which operated through its MyTrade MM platform, marketed itself as a cryptocurrency market maker while secretly offering clients "Volume Support" services that relied on wash trading. The scheme used automated trading bots to repeatedly buy and sell the same crypto assets, creating artificial trading volume and misleading investors about market activity.

The operation came to light during an undercover FBI investigation involving NexFundAI, a fictitious cryptocurrency project created by law enforcement. During recorded conversations with undercover agents posing as NexFundAI promoters, Zhou allegedly explained that MyTrade's bots executed self-trades within the same second and could also facilitate pump-and-dump schemes. He reportedly acknowledged that the objective was to attract unsuspecting investors whose losses would generate profits for others.

Investigators found that, as of October 2024, MyTrade MM was providing wash trading services to dozens of clients across approximately 60 cryptocurrencies, generating millions of dollars in artificial daily trading volume.

As part of his guilty plea, Zhou agreed that MyTrade would permanently discontinue its "Volume Support" service, deactivate all wash trading bots, and display a notice on its website stating that volume support constitutes wash trading and is illegal under U.S. law.

The case was announced by the U.S. Attorney's Office for the District of Massachusetts and the Federal Bureau of Investigation (FBI) Boston Division, highlighting continued enforcement efforts against market manipulation in the cryptocurrency sector.