2026-09-24 · Illicit Finance
Ten people at four crypto market-making firms are charged with manufacturing the trading volume that made tokens look alive. The Department of Justice discloses, in one sentence, how the case was built: the FBI minted the tokens.
Key findings
- The government created the assets. The Department of Justice states that as part of the undercover operation, “the FBI created several cryptocurrency tokens.” The firms are alleged to have wash traded assets the Bureau itself issued.
- Ten defendants across four firms (Gotbit, Vortex, Antier and Contrarian) are charged in three separate indictments in the Northern District of California, including two chief executives and two chief financial officers.
- Three defendants were extradited from Singapore and made their first appearance in Oakland on 30 March 2026. Two others had already pleaded guilty and been sentenced.
- This is a market-structure prosecution, not a theft case. Nothing was stolen from a wallet. The alleged fraud is manufacturing the appearance of organic trading and then selling into it.
- Only about $1 million in cryptocurrency has been seized, against charges carrying twenty years per count.
Case file
| Field | Value |
|---|---|
| Matter | Three indictments arising from one FBI and IRS-CI undercover operation |
| Court | N.D. Cal., Oakland and San Francisco grand juries |
| Judge (sentencings to date) | Araceli Martínez-Olguín |
| Firms named | Gotbit, Vortex, Antier, Contrarian |
| Charges | Wire fraud and wire fraud conspiracy, 18 U.S.C. §§ 1343 and 1349 |
| Maximum penalty | 20 years and a $250,000 fine per violation |
| Announced | 30 March 2026 |
| Seized to date | More than $1 million in cryptocurrency |
| Prosecutors | U.S. Attorney Craig H. Missakian; AUSAs Benjamin K. Kleinman, Daniel M. Pastor, Molly K. Priedeman |
| Posture as of 3 August 2026 | Two pleaded guilty and sentenced. Three in federal custody after extradition. Remaining defendants charged only |
What the record shows
What is alleged?
Federal grand juries in the Northern District of California indicted ten executives and employees of four cryptocurrency financial services firms, known as market makers, for schemes to artificially inflate the trading volume and price of cryptocurrencies. The Department of Justice announced the case on 30 March 2026.
The indictments allege the defendants conspired to inflate volume and price and also profited by selling the cryptocurrencies at inflated prices to unwitting investors, which the Department describes as pump-and-dump schemes causing losses to investors in the United States and elsewhere.
The Department’s own definition of the conduct, drawn from the indictment: wash trading “occurs when a single trader, or a number of traders, working in coordination, act as both the buyer and the seller in the same transaction or a series of transactions.” The effect alleged is that this “creates the appearance that these cryptocurrencies have more active, organic trading than really exists, thereby inducing investors to purchase the cryptocurrencies at artificially inflated prices.”
These are allegations. An indictment is a prosecutor’s assertion and is not a finding. The Department states that all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
The FBI minted the tokens
The Department states the origin of the case in a single sentence:
The indictments and arrests were the result of an undercover operation by the Federal Bureau of Investigation (FBI) and IRS Criminal Investigation (IRS-CI) targeting illicit “wash trading” in the cryptocurrency industry. As part of the undercover operation, the FBI created several cryptocurrency tokens.
[P]
The Bureau issued its own crypto assets and, on the government’s account, market makers were engaged to trade them.
Who is charged, and where each stands
Gotbit. On 25 March 2025 a federal grand jury in San Francisco indicted Antoine Tsao, a Taiwanese national and business development manager, Ian Sofronov, a Russian national and sales manager, and Nemanja Popov, a Serbian national and account manager, on wire fraud conspiracy and wire fraud. Tsao was arrested at John F. Kennedy International Airport on 30 March 2025, pleaded guilty to conspiracy to commit wire fraud on 2 June 2025, and was sentenced by U.S. District Judge Araceli Martínez-Olguín in Oakland. Popov was arrested at San Francisco International Airport and pleaded guilty and was sentenced on 10 February 2026 before the same judge. The Department’s release does not state either sentence length.
Vortex. On 28 August 2025 an Oakland grand jury indicted Gleb Gora, 24, chief executive, Sergei Ryzhkov, chief financial officer, and Michael Vogel, business development manager, all Russian nationals, on wire fraud conspiracy and wire fraud, for a scheme alleged to inflate a token’s price while planning to liquidate their holdings once trading reached a high price. Gora was arrested in Singapore on 2 October 2025 at the request of the United States and made his initial appearance in Oakland on 30 March 2026 following extradition.
Contrarian and Antier. On 4 September 2025 an Oakland grand jury indicted Manu Singh, 34, chief executive of Contrarian, Kushagra Srivastava, chief financial officer, Vasu Sharma, 26, business development associate, and Sabby Singh, a business development manager at Antier Solutions Private Limited, described as a Contrarian partner firm, all Indian nationals. [P] Manu Singh and Vasu Sharma were arrested in Singapore on 2 October 2025 and made their initial appearances in Oakland on 30 March 2026 following extradition.
Gora, Manu Singh and Vasu Sharma are in federal custody.
Who brought it
U.S. Attorney Craig H. Missakian, FBI Acting Special Agent in Charge Matt Cobo, and IRS-CI Oakland Field Office Special Agent in Charge Linda Nguyen announced the case. Assistant U.S. Attorneys Benjamin K. Kleinman, Daniel M. Pastor and Molly K. Priedeman are prosecuting, assisted by Amala James. The FBI’s legal attaché office in Singapore and the Justice Department’s Office of International Affairs worked with the Singapore Police Force and Attorney General’s Chambers on the arrests and extraditions.
The charges carry a maximum of 20 years and a $250,000 fine for each violation of 18 U.S.C. §§ 1343 and 1349. More than $1 million in cryptocurrency has been seized to date.
Cite as: Max Avery, “The FBI created its own tokens to catch market makers”, maxavery.org, 24 September 2026. Primary source: U.S. Department of Justice, U.S. Attorney’s Office for the Northern District of California, press release of 30 March 2026.
What I think is going on
The sentence about the FBI creating tokens is doing more work than its placement suggests, and I think it is the most consequential thing the Department has said about crypto enforcement in a while.
Consider what an undercover token means as an investigative instrument. In a conventional market-manipulation case, the government reconstructs what happened from exchange records, chat logs and blockchain data, and then argues about intent. Every element is contested and every witness is a cooperator with a motive. Here, on the government’s account, agents controlled the asset. They know exactly what the token was, because they made it. They know it had no users, no product and no organic demand, because they created it that way. When a market maker proposes to generate volume for it, there is no innocent explanation available about genuine liquidity provision, and the pitch itself is the evidence.
That is a fundamentally stronger case than the ones prosecutors usually get, and it explains the extraditions. Singapore does not surrender people for speculative charges.
The second thing worth saying plainly: this is not a theft story and that is why it matters. Every case on this desk so far involves somebody’s assets leaving somebody’s control. Nothing left a wallet here. The alleged harm is that a retail buyer looked at a chart, saw volume, and concluded that other people wanted the token. That inference is the entire product being sold. Wash trading is the manufacture of a false signal, and the signal it fakes is the one nearly every retail participant relies on most heavily.
If you have ever screened tokens by trading volume, this case is about you. The volume figure on a listing page is not a measurement of interest. It is the number most cheaply purchased by whoever benefits from your believing it. On the government’s account, there is an industry of firms whose service is producing exactly that number, marketed openly to token issuers, with sales managers and account managers and business development staff. The org charts in these indictments are ordinary. Two chief executives, two chief financial officers, several business development people. This is a service business.
Notice also the mismatch between the charges and the seizures. Ten defendants, wire fraud counts carrying twenty years each, and just over $1 million recovered. Whatever these firms were paid, the government has not found much of it. The prosecution is buying deterrence rather than restitution, which is a reasonable objective and should be described as what it is.
The unresolved question I would want answered is the entrapment-adjacent one, and I say entrapment-adjacent because the defense is genuinely hard to run here. If the FBI created a token and solicited market-making services for it, defendants will argue the government manufactured the crime. That argument tends to fail where the defendant showed predisposition, and firms that already had sales managers and account managers for this service will struggle to show they were induced into a business they were plainly already in. Expect it to be raised. I would not expect it to work.
What reduces your exposure
Nothing structural touches this one. If you bought a token whose volume was manufactured, no entity, custodian or trust would have changed the outcome, because the failure happened before you ever pressed buy. What follows is about reading a market.
Treat reported volume as an unverified claim by an interested party. Volume is the easiest metric to fabricate and the most commonly used to screen. The four firms named in these indictments existed, on the government’s account, to produce it to order. A chart showing sustained activity is evidence that somebody wanted you to see sustained activity.
Look at holder distribution and order-book depth instead. Neither is manipulation-proof, but both cost the manipulator real capital to fake, whereas wash trading costs only fees. A token with heavy volume, a thin book and concentrated holders is describing itself accurately if you read the second and third numbers rather than the first.
Ask who is being paid to make the market. Market making is a legitimate function and most of it is lawful. The question worth asking of any new listing is whether the issuer engaged a market maker, on what terms, and whether the arrangement pays for liquidity or for volume. Those are different products and only one of them is a service to you.
Assume nothing is recoverable. More than $1 million was seized across ten defendants at four firms. If you were on the losing side of a manufactured chart, the realistic expectation is that a criminal case will not make you whole.
None of this identifies a manufactured market reliably from the outside, and a well-funded operation can fake depth as well as volume. It moves you off the single number that is cheapest to fake.
Sources
- U.S. Department of Justice, U.S. Attorney’s Office for the Northern District of California, “Ten Foreign Nationals Charged In An International Operation Targeting Cryptocurrency Market Manipulation”, 30 March 2026. https://www.justice.gov/usao-ndca/pr/ten-foreign-nationals-charged-international-operation-targeting-cryptocurrency-market
Related on this desk
- Mirror Trading International: 29,421 bitcoin and a trading bot that never existed — manufactured returns instead of manufactured volume, same trick one layer down.
- CFTC v Ooki DAO: a DAO can be sued as an unincorporated association — the regulator reaching a trading venue that was built not to have an operator.
- Mango Markets: the acquittal that was mostly a venue ruling — market manipulation charged, and what a court required the government to prove.
Disclosure. Max Avery is affiliated with Digital Ascension Group (DAG). Investment advisory services are offered through DAG Wealth, an SEC-registered investment adviser (CRD No. 328627). Registration does not imply a certain level of skill or training. DAG is not a law firm and does not provide legal or tax advice. Custody arrangements with third-party independent qualified custodians reduce certain risks but do not eliminate them. Nothing here is investment, legal, or tax advice, or a recommendation to buy or sell any asset. This article describes matters of public record; charges are allegations and defendants are presumed innocent unless and until proven guilty.