FBI Sting Created NexFundAI Crypto Token To Bring Down Fraud Scheme

Updated: 10 October 2024

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The FBI has charged eight companies for operating an alleged pump-and-dump scheme after creating a fake crypto token, NexFundAI, as part of an undercover sting.

Crypto companies Saitama, Robo Inu, VZZN and Lilian Finance, and market makers Gotbit, ZM Quant, CLS Global and MyTradeMM were all accused of working together to manipulate the prices of over 60 low cap coins.

Suits against these companies were filed on Oct. 9 by the US Securities and Exchange Commission (SEC).

FBI Launches NexFundAI After SEC’s Saitama Tip Off

The FBI received a tip off from the SEC that Saitama was engaging in market manipulation to increase its token’s price and make investors believe that there was interest in the project.

Eventually, the investigation into the project led to the launch of NexFundAI, a fake token created by the FBI to observe how these on-demand market makers operated.

The fake crypto only traded for 24 hours on May 31. During this period, it generated $4,600 in artificial trading volume.

Saitama Inu was a pump and dump that ran up to a $7 billion marketcap back in 2021.

Given that the FBI charged them today, everyone launching pump and dumps now has until 2027 to enjoy their freedom.

— Slorg (@SlorgoftheSlugs) October 9, 2024

The sting worked, with 18 individuals across the accused companies being charged with fraud. So far, 4 of the accused fraudsters have pleaded guilty. Multiple wash trading bots, which are software scripts that trade against themselves to create the illusion of market activity, were also shut down shortly after the charges were filed.

Robo Inu, SaitaRealty And SaitaChain Also Under Investigation

The FBI has listed more crypto companies that are currently being investigated for fraudulent market activity. In a separate statement, it named Robo Inu, SaitaRealty and SaitaChain as projects that are being looked into.

According to the FBI, these companies have “made false statements about their cryptocurrencies” and have performed several “sham trades” to make their tokens look like good investments.