Gotbit Founder Sentenced to 8 Months in Prison for Multimillion-Dollar Crypto Wash Trading Scheme

A federal court in Boston has sentenced the founder of cryptocurrency market maker Gotbit Consulting LLC to eight months in prison for orchestrating a sophisticated wash trading scheme that artificially inflated trading volumes across multiple digital assets, marking another significant enforcement action in the government's ongoing crackdown on cryptocurrency market manipulation.

The Sentencing and Charges

Aleksei Andriunin, the 26-year-old founder and CEO of Gotbit, received his sentence from U.S. District Court Judge Angel Kelley following his guilty plea in March 2025 to charges of wire fraud and conspiracy to commit market manipulation. The dual citizen of Russia and Portugal was arrested in Portugal in October 2024 and extradited to the United States in February 2025.

The sentencing represents the culmination of a federal investigation that exposed how Gotbit operated as a criminal enterprise disguised as a legitimate market-making service. As part of the plea agreement, Andriunin agreed to forfeit approximately $23 million in stablecoins held in cryptocurrency wallets linked to Gotbit's operations.

Understanding Wash Trading in Cryptocurrency Markets

Wash trading is a form of market manipulation where traders buy and sell the same financial instruments to create misleading activity in the marketplace. In traditional markets, this practice has been illegal for decades, but the cryptocurrency space has provided new opportunities for bad actors to exploit regulatory gaps and technological complexities.

In Gotbit's case, the scheme involved creating artificial trading volume to make client cryptocurrencies appear more active and popular than they actually were. This deceptive practice served multiple purposes: it helped tokens gain listings on major cryptocurrency exchanges, improved their rankings on cryptocurrency tracking websites like CoinMarketCap, and created the false impression of market interest that could attract legitimate investors.

The Mechanics of Gotbit's Operation

Between 2018 and 2024, Gotbit offered what prosecutors described as "market manipulation services" to cryptocurrency companies, including those based in the United States and those whose tokens traded on platforms accessible to U.S. investors. The company's sophisticated approach to wash trading involved several key elements:

Algorithmic Trading Bots: Andriunin developed specialized code to automate the wash trading process, allowing Gotbit to execute large volumes of artificial trades efficiently. According to court documents, these algorithms could generate more than $1 million in artificial trading volume daily for certain tokens.

Multiple Account Strategy: To avoid detection on public blockchains, Gotbit used multiple trading accounts across different platforms. This strategy was designed to obscure the connection between buy and sell orders that were actually being executed by the same entity.

Professional Marketing: The company actively marketed its wash trading services to prospective clients, explaining how their techniques could help tokens gain prominence on cryptocurrency exchanges and tracking websites.

Volume Targets: Gotbit provided specific volume targets and guarantees to clients, treating market manipulation as a standardized service offering.

High-Profile Victims and Client Cases

The scheme affected numerous cryptocurrency projects, with prosecutors specifically identifying tokens, including Robo Inu and Saitama, as victims of Gotbit's manipulation services. The Robo Inu case provides a particularly detailed example of how the scheme operated.

According to Securities and Exchange Commission allegations, crypto asset promoter Vy Pham hired Gotbit to provide "market-manipulation-as-a-service" for Robo Inu, a token being offered to retail investors. The SEC alleged that Gotbit and its employees manipulated the market through self-trading on popular cryptocurrency platforms, using trading practices that served no legitimate economic purpose.

The artificial volume generation was substantial and systematic. Court documents indicate that Gotbit's algorithms could create the appearance of active trading even when genuine investor interest was minimal, potentially misleading retail investors about the true market conditions for these tokens.

Corporate Structure and International Dimensions

Gotbit Consulting LLC was structured as a Belize entity, reflecting the international nature of cryptocurrency market manipulation schemes. The company's global reach allowed it to serve clients worldwide while attempting to exploit jurisdictional complexities in cryptocurrency regulation.

The case also highlighted the challenges law enforcement faces in pursuing cryptocurrency crimes across international boundaries. Andriunin's arrest in Portugal and subsequent extradition to the United States demonstrated the increasing cooperation between international law enforcement agencies in cryptocurrency-related cases.

Broader Enforcement Pattern

Gotbit's prosecution represents part of a broader enforcement pattern targeting cryptocurrency market makers engaged in illegal activities. The company is the third market maker to face criminal charges for wash trading in the cryptocurrency industry, following similar actions against MyTrade and CLS Global.

In October 2024, the founder of MyTrade pleaded guilty to providing unlawful wash trading services identified through an undercover law enforcement operation. In April 2025, CLS Global FZC LLC was sentenced in connection with offering illegal "volume support" services uncovered by the same operation.

This enforcement pattern suggests that federal prosecutors and regulators have developed sophisticated methods for identifying and prosecuting cryptocurrency market manipulation, potentially including undercover operations and advanced blockchain analysis techniques.

Regulatory and Civil Enforcement Actions

Beyond the criminal charges, the Securities and Exchange Commission filed a separate civil enforcement action against Gotbit for securities law violations. The SEC's complaint charged Gotbit and employee Fedor Kedrov with violating multiple provisions of federal securities laws, including Sections 17(a)(1) and (3) of the Securities Act of 1933, and Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934.

The civil action seeks permanent injunctions, conduct-based injunctions, disgorgement of ill-gotten gains plus interest, and civil penalties. This parallel approach of criminal and civil enforcement demonstrates the government's comprehensive strategy for addressing cryptocurrency market manipulation.

Technical Challenges in Detection and Prosecution

The Gotbit case illustrates both the challenges and evolving capabilities in detecting cryptocurrency market manipulation. While blockchain technology creates permanent, public records of all transactions, the pseudonymous nature of cryptocurrency addresses and the ability to create multiple accounts across different platforms initially provided cover for manipulative schemes.

However, the successful prosecution of Gotbit and similar cases suggests that law enforcement has developed increasingly sophisticated blockchain analysis capabilities. The ability to trace connections between multiple accounts, identify patterns of wash trading, and connect these activities to specific individuals and entities represents a significant evolution in cryptocurrency law enforcement.

Industry Impact and Implications

The Gotbit prosecution carries significant implications for the cryptocurrency industry, particularly for legitimate market makers and trading firms. The case establishes clear precedents for how traditional market manipulation laws apply to cryptocurrency markets, potentially influencing how other market participants structure their operations.

For legitimate market makers, the case underscores the importance of maintaining clear boundaries between lawful market-making activities and manipulative practices. While providing liquidity and reducing spreads in cryptocurrency markets can serve legitimate purposes, the Gotbit case demonstrates that schemes designed primarily to create artificial volume and mislead investors will face serious legal consequences.

Sentencing Details and Future Restrictions

In addition to the eight-month prison sentence, Andriunin will serve one year of supervised release and is barred from engaging in cryptocurrency-related activities during that period. The company itself was sentenced to five years of probation, during which it must cease to exist or operate.

The $23 million forfeiture represents one of the largest cryptocurrency forfeitures in a market manipulation case, demonstrating the substantial profits that can be generated through such schemes while also showing the government's ability to recover illicit proceeds held in cryptocurrency wallets.

Outstanding Co-Defendants

The case against Gotbit directors Fedor Kedrov and Qawi Jalili remains pending, with both individuals facing similar charges related to the company's wash trading operations. The prosecution of these co-defendants will likely provide additional details about the internal operations of the scheme and the roles of various participants.

Lessons for Market Participants and Investors

The Gotbit case offers several important lessons for cryptocurrency market participants and investors. For market participants, it demonstrates that sophisticated technical methods for concealing market manipulation will not necessarily provide protection from law enforcement scrutiny. The case shows that blockchain analysis and traditional investigative techniques can effectively identify and prosecute complex manipulation schemes.

For investors, the case highlights the importance of conducting thorough due diligence before investing in cryptocurrency projects. The artificial volume and activity created by services like Gotbit's can make tokens appear more legitimate and popular than they actually are, potentially leading investors to make decisions based on misleading information.

Conclusion

The sentencing of Aleksei Andriunin and the resolution of the Gotbit case represent significant milestones in the ongoing effort to bring traditional market integrity standards to cryptocurrency markets. The case demonstrates that sophisticated market manipulation schemes will face serious legal consequences, regardless of the technical complexity or international scope of the operations.

As the cryptocurrency industry continues to mature and attract mainstream investment, the enforcement actions against companies like Gotbit help establish clear boundaries between legitimate market activities and criminal market manipulation. The substantial prison sentence, large forfeiture, and comprehensive civil enforcement action send a strong message that market manipulation in cryptocurrency markets will be prosecuted with the same vigor as similar crimes in traditional financial markets.

The case also illustrates the evolving capabilities of law enforcement and regulators in addressing cryptocurrency-related crimes, suggesting that the technical anonymity features of blockchain technology are not insurmountable barriers to effective enforcement. As these capabilities continue to develop, market participants can expect increased scrutiny of trading practices and a higher standard of compliance with existing market integrity rules.