Wash Bot Operator Walks Free With $10K Fine, A Cost-Of-Business Discount 🧼

The founder of crypto market maker MyTrade avoided prison and was fined $10,000 on Thursday for running a wash trading service that generated millions of dollars in fake daily volume across roughly 60 cryptocurrencies. Liu Zhou, 41, a Canadian citizen and Chinese national, was sentenced in Boston federal court by U.S. District Judge Angel Kelley, who imposed no custodial term. Zhou had pleaded guilty to conspiracy to commit market manipulation and wire fraud after being charged in October 2024 alongside 17 other individuals and entities.

MyTrade sold the service openly. Clients logged into a dashboard on the MyTrade MM website and specified how many wash trades they wanted executed each day on named exchanges, a product the firm called "Volume Support." Bots carried out the trades, buying and selling the same asset repeatedly to inflate apparent volume, and the service had dozens of clients as of October 2024. Zhou was candid with prospective customers, telling them MyTrade MM "does self-trades — a buy and a sell in the same second" and that its volume bot could be used to run pump and dumps. The point, he said, 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."

Investigators built NexFundAI, a fictitious crypto company with a website and an $ETH-based token that traded on Uniswap until law enforcement disabled it, and used it to solicit market-making services and record what was offered. The sting produced charges against 18 individuals and entities in October 2024, including market makers Gotbit, ZM Quant and CLS Global. Over $25 million in crypto has been seized in the case, the U.S. Department of Justice said.

Zhou's plea agreement required MyTrade MM to stop selling Volume Support and permanently deactivate the bots behind it. The firm was also required to post a notice on its own website stating that volume support is "a form of wash trading and illegal under the laws of the United States."

Separately, the U.S. Senate will not vote on the Clarity Act before its August recess, pushing the crypto market structure bill to September and into the closing weeks before midterm campaigning consumes the calendar. Senate Majority Leader John Thune (R-SD) confirmed the delay late Thursday, saying "The Dems are insistent on no Clarity vote" and noting he had worked with the bill's sponsors, including Senator Cynthia Lummis (R-WY), who "was great."