Crypto▼ Bearish
MyTrade Founder Fined $10K, Avoids Prison for Wash Trading
Liu Zhou got no jail time and a $10,000 fine after admitting to running a wash trading service that faked volume across roughly 60 cryptocurrencies. His firm must post a notice calling its own product illegal.
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The founder of a crypto market-making firm that ran what prosecutors called an open-for-business wash trading service kept out of prison. He got a $10,000 fine and an order to post a confession on his own website.
Liu Zhou, 41, a Canadian citizen and Chinese national, was sentenced Thursday in Boston federal court by U.S. District Judge Angel Kelley. He pleaded guilty to conspiracy to commit market manipulation and wire fraud, Law360 reported. The sentence carried no custodial term.
MyTrade, Zhou's firm, sold its service through a dashboard. Clients logged into the MyTrade MM website and entered how many wash trades they wanted each day on named exchanges. The firm called the product "Volume Support." Bots executed the trades, buying and selling the same asset repeatedly to pump up apparent volume. As of October 2024 the service had dozens of clients.
Zhou was direct with people he thought were potential customers. "MyTrade MM does self-trades – a buy and a sell in the same second," he told them. The volume bot, he explained, could also run pump and dumps. The goal was to draw in "other buyers from the community, people you don't know about or don't care about," because "we have to make [the other buyers] lose money in order to make profit."