The Gotbit crypto market manipulation scheme has been exposed by the United States Securities and Exchange Commission (SEC).
Aleksei Andriunin, the CEO of Gotbit Consulting LLC, has been exposed by the United States Securities and Exchange Commission (SEC) for his fraudulent activities.
The accusations encompass severe charges, such as conspiracy to commit market manipulation, wire fraud, and money laundering from 2018 to 2024.
Gotbit was purportedly involved in a scheme that involved the artificial inflating of trading volumes through wash trading.
This deceptive practice created the illusion of active markets, which misled investors and drove prices up. The firms then sold off their holdings at inflated valuations, a classic pump-and-dump scheme.
Gotbit was accused of earning millions of dollars through these illegal activities. It was alleged that Andriunin publicly discussed the methods for executing wash trades and manipulating crypto trading volume in 2019. Furthermore, Fedor Kedrov and Qawi Jalili, employed by Gotbit, were accused of divulging the wash trading scheme to prospective clients and providing them with guidance on circumventing detection.
Additionally, they provided illicit services associated with various cryptocurrencies, such as Saitama and Robo Inu.
ZachXBT, a crypto scam detector, provided insight into Gotbit’s suspicious practices in September 2023. The security firm warned about Gotbit’s strategies to inflate token prices artificially. The firm presented a leaked report detailing plans to significantly increase prices during initial token listings to induce FOMO among investors.
Market Impact, Panic, and Long-Term Resilience
The crowd’s initial response to the news has been one of panic and concern, as is typical when significant frauds are exposed, as anticipated. Santiment, an on-chain analytic firm, observed that these incidents frequently result in temporary distrust within the community.
Nevertheless, they identified an intriguing trend: markets frequently deviate from the prevailing sentiment of the crowd. Although short-term reactions may suggest a price decline, recent history indicates that fear-driven sell-offs can establish a favorable environment for a bullish rebound.
Retail traders are likely to experience fear, uncertainty, and doubt (FUD) due to the manipulation’s scope, which involves the transfer of more than $42 million through Gotbit’s wallets.
This sentiment shift can result in panic selling, which could particularly impact assets closely associated with Gotbit, such as Saitama and Robo Inu.
These assets have already experienced substantial losses in the immediate market response, with Saitama reportedly experiencing a 63% decline in just a few hours.
Santiment underscores the crypto market’s resilience despite the present turmoil. Ultimately, disclosing such manipulative practices could promote a healthier trading environment, bolstering the ecosystem’s trust. Therefore, the market could rebound as investors reevaluate the situation, even though the immediate response to the news may be harmful. Santiment declared:
“The crowd’s tendency to overreact could ultimately lead to a surprising bullish move. Retail traders often sell at the worst times, and this case may be another example of markets moving in the opposite direction of general sentiment.”
It is recommended that traders remain vigilant, as there may be substantial opportunities for those who can navigate the crowd’s emotional responses.