Gotbit founder Aleksei Andriunin has been extradited to the US to face charges related to market manipulation and wire fraud conspiracy, according to a Feb. 26 statement by the US Attorney’s Office District of Massachusetts.
Andriunin was arrested on Oct. 8, 2024, by authorities in Portugal, where he was living. Following his extradition, he appeared in federal court in Boston on Feb. 25 and was ordered to be detained pending a future hearing.
On Oct. 31, 2024, a federal grand jury in Boston indicted Andriunin and Gotbit directors Fedor Kedrov and Qawi Jalili on charges of wire fraud and conspiracy to commit market manipulation and wire fraud.
Market manipulation
According to court documents, Gotbit allegedly operated as a “market maker” in the crypto industry, providing market manipulation services between 2018 and 2024.
Andriunin allegedly created software to facilitate “wash trading,” a practice that artificially inflates trading volumes. This tactic helped projects secure listings on data aggregators such as CoinMarketCap and gain entry to larger exchanges.
Investigators allege that Gotbit employees, including Jalili and Kedrov, marketed these tactics to clients and used multiple accounts to disguise the wash trading from blockchain observers.
The scheme reportedly involved transactions worth millions of dollars, with Gotbit generating tens of millions in revenue from fraudulent activities. The authorities accuse Andriunin of transferring a portion of these proceeds into his personal Binance account.
If convicted, Andriunin faces up to 20 years in prison for wire fraud and up to five years for conspiracy to commit market manipulation and wire fraud. He could also be subject to fines of up to $250,000 or twice the gross gain or loss from the offenses, restitution, and forfeiture.
Artificial trading volume
The US Securities and Exchange Commission (SEC) also filed fraud charges against Gotbit and its employee, Fedor Kedrov, on Oct. 15, 2024.
The SEC alleged that the platform used a scheme to manipulate the market for “Robo Inu,” a crypto asset marketed as a security to retail investors.
According to the SEC complaint, crypto asset promoter Vy Pham hired Gotbit to generate artificial trading volume for Robo Inu. Gotbit allegedly employed wash trading techniques to generate fake market activity on trading platforms.
Investigators claim the firm used automated trading algorithms to fabricate over $1 million daily artificial trading volume.
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