Key Takeaways
- Authorities said that from February to September 2021, the company engaged in over 80,000 wash trades on Uniswap
- Funds seized from CLS Global will be applied toward both criminal penalties and a parallel civil enforcement case filed by the U.S. SEC
A federal court in Boston has fined UAE-based crypto market maker CLS Global $428,059 and prohibited it from participating in digital asset markets accessible to U.S. investors for the next three years. The sentencing, announced by the Massachusetts U.S. Attorney’s Office on April 2, follows CLS Global’s January 2025 guilty plea to charges of market manipulation and wire fraud. The case emerged from an FBI-led undercover operation that targeted illicit trading activity in crypto markets.
The U.S. Department of Justice (DOJ) charged CLS Global in September 2024 with one count of conspiracy to commit market manipulation and wire fraud, along with a separate count of wire fraud. Authorities said that from February to September 2021, the company engaged in over 80,000 wash trades on Uniswap.
The trades were conducted in connection with NexFundAI, a fake Ethereum-based token created by the FBI as part of a sting. According to the DOJ, CLS Global agreed to inflate the token’s trading volume to help it meet exchange listing requirements. The firm used an algorithm to conduct coordinated self-trades across multiple wallets. These transactions were designed to imitate organic market activity and boost the token’s perceived value and popularity.
In a statement, Commodity Futures Trading Commission (CFTC) Enforcement Director Ian McGinley said, “Wash trading undermines trust in the marketplace and harms both investors and legitimate market participants.” He added that the action shows the CFTC “will not tolerate such manipulation—regardless of where a firm is located.”
As part of the plea agreement, funds seized from CLS Global will be applied toward both criminal penalties and a parallel civil enforcement case filed by the U.S. Securities and Exchange Commission (SEC). The SEC’s complaint alleges that the company’s conduct violated federal securities laws. The three-year probation period imposed by the court prohibits CLS Global from engaging in any crypto-related activity involving U.S. markets during that time.
As per reports, court documents also indicate that CLS Global misrepresented its role as a liquidity provider and market maker. The company and its U.S.-based affiliate, Clarity Ventures, claimed they were using proprietary trading algorithms to generate volume and stabilize token prices. According to the DOJ, these representations were false and part of a coordinated plan to deceive trading platforms and market participants.
