TLDR
- Gotbit founder Aleksei Andriunin has reached a plea deal to forfeit $23 million in crypto assets for market manipulation charges
- The agreement could result in no prison time, with 3 years of supervised release during which he cannot participate in crypto activities
- Andriunin faced up to 20 years in prison on charges of wire fraud and conspiracy to commit market manipulation
- Gotbit allegedly operated as a market manipulation enterprise between 2018-2024, using “wash trades” to inflate token prices
- Gotbit was one of four crypto companies charged in the first U.S. criminal prosecution targeting market manipulation in the crypto industry
In a major development for the cryptocurrency industry, Gotbit founder Aleksei Andriunin has reached a plea agreement with U.S. authorities to forfeit $23 million in cryptocurrency assets. The 26-year-old founder of the market-making firm was facing charges related to market manipulation and wire fraud that could have resulted in up to 20 years in prison.
Andriunin was extradited to the United States in late February after being arrested in Portugal four months earlier. The charges stem from Gotbit’s operations between 2018 and 2024, during which the company allegedly offered token price-inflating services to various crypto projects, including some based in the United States.
Court documents cited by Law360 indicate that Andriunin’s activities with Gotbit caused financial “harm to dispersed market participants” who purchased cryptocurrency “at fraudulently inflated prices.” This case represents one of the most high-profile enforcement actions in the crypto market manipulation space to date.
The plea agreement outlines a deal that could result in no prison time for Andriunin. Instead, he would serve three years of supervised release with strict conditions preventing his participation in any cryptocurrency activities during that period.
The assets subject to forfeiture total $23 million and include amounts kept in stablecoins issued by Tether and Circle. These funds are spread across four wallets that were “solely controlled” by Andriunin, according to federal prosecutors.
Inside Gotbit’s Wash Trading Operation
Specifically, Andriunin will forfeit USDT (Tether) valued at nearly $14 million stored in two different crypto wallet addresses. He will also surrender approximately $9 million in USDC stored in two additional wallets.
The court documents state that while these assets are listed as property of Gotbit Consulting LLC, the wallets are solely controlled by Andriunin on Gotbit’s behalf. As stated by Lead B. Foley from the U.S. Attorney’s office, “Defendant agrees to assist fully in the forfeiture of the above assets. Defendant agrees to promptly take all steps necessary to pass clear title to the above assets to the United States.”
According to federal prosecutors, Gotbit primarily engaged in extensive “wash trades” that “deceptively created the appearance of increased trading activity.” Wash trading refers to the practice of simultaneously buying and selling the same asset to create artificial trading volume, which can mislead other market participants.
In a separate complaint filed by the SEC against Gotbit and Fedor Kedrov, described as the firm’s marketing director, regulators claimed that the crypto firm maintained detailed records. These records allegedly compared artificially “created volume” against natural “market volume” in crypto markets.
The indictment suggests that Gotbit openly recruited clients with pitches explicitly outlining how their service would help obscure activities on public blockchains. This suggests a deliberate effort to manipulate market perceptions of trading activity and liquidity.
Interestingly, in a 2019 interview later referenced in Justice Department filings, Andriunin admitted that Gotbit’s business model was “not entirely ethical.” This admission may have played a role in the prosecution’s case against him.
Gotbit was one of four companies charged by U.S. prosecutors in October 2023. This marked the first criminal prosecution specifically targeting market manipulation and sham trading in the cryptocurrency industry. The other three companies named in the action were ZM Quant, CLS Global, and MyTrade.
According to reports, over $25 million in cryptocurrency has been seized in connection with the broader case. Law enforcement officials even created a fake digital token to catch alleged criminals in the act of manipulation, highlighting the sophisticated approach taken by prosecutors.
Following the charges, many meme coin projects that had partnered with Gotbit for liquidity services began distancing themselves from the firm. Some issued statements disavowing their previous relationship with the company, indicating the ripple effects these charges have had throughout the cryptocurrency ecosystem.
The plea deal is pending court approval. While the agreement could result in no prison time and no additional fines beyond the forfeiture, the court retains final discretion over the sentencing terms.
Federal prosecutors have outlined that the maximum penalties for the market manipulation and wire fraud charges could include fines of $500,000 or twice the amount gained or lost from the offenses. Additional penalties could include mandatory restitution and up to five years of probation.
The plea letter details an agreement communicated to both the court and defense counsel. It includes provisions allowing either party to withdraw if the court rejects any element of the proposed deal.
