US court fines UAE crypto firm CLS Global $428K for wash trading

Authorities in the US state of Massachusetts continue targeting unlawful cryptocurrency market practices, with a local court fining crypto financial services firm CLS Global.

A federal court in Boston on April 2 sentenced CLS Global on criminal charges related to fraudulent manipulation of crypto trading volume, according to an announcement from the Massachusetts US Attorney’s Office.

In addition to a $428,059 fine, the court prohibited CLS Global from offering services in the US for a probation period of three years.

CLS Global, a crypto market maker registered in the United Arab Emirates, in January pleaded guilty to one count of conspiracy to commit market manipulation and one count of wire fraud.

The charges against CLS Global followed an undercover law enforcement operation involving NexFundAI, a token created by the FBI as part of a sting operation in May 2024.

CLS Global was among at least three firms that took the FBI’s bait and agreed to provide “market maker services” for NexFundAI, including a fraudulent scheme to attract investors to purchase the token.

In October 2024, the Securities and Exchange Commission announced fraud charges against CLS and its employee, Andrey Zhorzhes. The US securities regulator also filed complaints against two other NexFundAI manipulators, Hong Kong-linked ZM Quant Investment and Russia-linked Gotbit Consulting.

According to CLS Global CEO Filipp Veselov, the company was founded in 2017 to fill in a “huge gap in the market for high-quality market-making solutions and trading consulting.”

Prior to CLS, Veselov worked at the Russian cryptocurrency exchange platform Latoken, which is advertised as a “global digital asset exchange” and has about 370,000 followers on X.

The CLS team also includes chief revenue officer Pavel Singaevskii, who previously served as sales manager at Stex, a crypto platform that reportedly ceased operations without warning in 2023.

Source: CLS Global

According to CLS Global’s X page, the platform continues operating and has more than 110,000 followers at the time of publication.

Wash trading is an illegal practice involving artificially inflating trading volume by repeatedly buying and selling the same asset, generating a misleading perception of demand.

According to a January 2025 report by the US blockchain analytics firm Chainalysis, the crypto market has at least $2.6 billion in estimated wash traded volumes, or just about 2% of total daily crypto trading volumes, as reported by CoinGecko.

Estimated wash trade volume in crypto. Source: Chainalysis

Related: Russian Gotbit founder strikes $23M plea deal with US prosecutors

Some studies indicate that wash trading makes up a bigger share of the crypto market.

In 2022, the US National Bureau of Economic Research reported that illegal wash trading may account for as much as 70% of average trading volumes on unregulated exchanges.

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