Gotbit Founder Pleads Guilty, Forfeits $23M in Stablecoins

Aleksei Andriunin, the founder of crypto market maker Gotbit, has reached a significant plea agreement with federal prosecutors in Massachusetts. This deal involves Andriunin forfeiting approximately $23 million in Tether (USDT) and Circle’s USDC stablecoins, marking a substantial development in the ongoing efforts to combat cryptocurrency market manipulation.

Andriunin, a citizen of Russia, faced serious charges including wire fraud and conspiracy to commit market manipulation. These charges stemmed from Gotbit’s alleged unlicensed operations, which were accused of orchestrating a “widespread cryptocurrency market manipulation scheme.” The scheme involved creating artificial trading volume for various crypto projects globally through practices such as wash trading. Wash trading is an illegal activity where an entity simultaneously buys and sells the same asset to create false volume and mislead other investors.

These activities are alleged to have occurred between 2017 and 2024 while Andriunin served as the CEO of Gotbit. In a 2019 interview, Andriunin himself admitted that Gotbit’s business model was “not entirely ethical,” suggesting an awareness of the legal and ethical issues surrounding their operations.

Under the terms of the plea agreement, Andriunin will plead guilty to conspiracy to commit wire fraud and market manipulation. The original charges carried a maximum sentence of 20 years or more, but the plea agreement could significantly reduce his prison time. Andriunin will serve a 24-month prison sentence followed by 36 months of probation. During his supervised release, he will be prohibited from engaging in any crypto-related activities.

The agreement also stipulates that Andriunin will not be required to pay any additional fines, as the forfeiture of the cryptocurrency gained from the offenses covers the financial penalties. The forfeited assets include nearly $14 million in Tether held in two separate crypto wallets and approximately $9 million in USDC stored in two other wallets. These assets, registered under Gotbit Consulting LLC, are entirely controlled by Andriunin on behalf of Gotbit, highlighting his direct involvement with the illicit funds.

Leah Foley, an official from the US Attorney’s Office for the District of Massachusetts, emphasized that the agreement does not limit the authority of the Attorney General of the United States or any other prosecuting authority. This plea deal represents a significant step in the legal efforts to address market manipulation in the cryptocurrency industry, underscoring the seriousness with which authorities are treating such offenses.