CLS Global Fined $428,059 for Wash Trading, Banned from U.S. Crypto Markets for 3 Years

A financial services firm has been fined over $400,000 after pleading guilty to wash trading in a Boston court. CLS Global, a firm that specializes in market making, was ordered to pay a total of $428,059 to the government, in the form of seized cryptocurrency and fines. The company was also sentenced to three years’ probation, during which time it will not be able to participate in U.S. cryptocurrency markets. These charges followed an undercover law enforcement operation which specifically targeted sham trading, wash trading and activity intended to attract investors.

CLS Global agreed to provide services for NexFundAI, an apparent cryptocurrency firm and Ethereum-based token traded on decentralized exchange Uniswap. In fact, the token and company were both created by the FBI as part of a sting operation targeting wash trading. CLS Global, with a staff of 50 employed individuals, is based in the United Arab Emirates but works with cryptocurrencies available to investors inside the United States. The company pleaded guilty to one count of conspiracy to commit market manipulation and wire fraud and one count of wire fraud in January 2025. In a statement, the U.S. Attorney's Office for the District of Massachusetts noted that a remaining defendant in the case is presumed innocent “unless and until proven guilty beyond a reasonable doubt in a court of law.”

In a series of videoconferences, an employee of the firm revealed that the firm employed an algorithm that, “basically does self-trades,” making cryptocurrency trades from multiple wallets in an effort to mimic “organic buying and selling.” The employee went on to say, “I know that it’s wash trading and I know people might not be happy about it.”

This case highlights the ongoing efforts by regulatory authorities to crack down on illegal activities in the cryptocurrency market. Wash trading, which involves buying and selling assets to create the appearance of market activity, is a form of market manipulation that can mislead investors and distort market prices. The significant fine and probation period imposed on CLS Global serve as a strong deterrent to other market participants considering similar activities. The use of an undercover operation by law enforcement demonstrates the proactive measures being taken to identify and prosecute such illegal practices. The involvement of the FBI in creating a fake cryptocurrency firm and token underscores the sophistication of these investigations and the commitment to maintaining the integrity of the market. The three-year probation period, during which CLS Global is barred from participating in U.S. cryptocurrency markets, further emphasizes the severity of the offense and the need for compliance with regulatory standards. This case sets a precedent for future enforcement actions and sends a clear message to the industry about the consequences of engaging in wash trading and other forms of market manipulation.