MyTrade founder and primary operator Liu Zhou has been fined $10,000 after admitting that his cryptocurrency market-making platform used automated bots to carry out wash trades involving dozens of digital tokens.
A federal court in Boston imposed the fine on Zhou, 41, who is a Canadian citizen and Chinese national, for his role in a conspiracy to manipulate cryptocurrency markets. U.S. District Judge Angel Kelley issued the sentence, according to the Department of Justice.
Zhou pleaded guilty to conspiracy to commit market manipulation and wire fraud. Federal prosecutors charged him alongside 17 alleged co-conspirators in October 2024.
MyTrade offered market-making services through its MyTrade MM website and application. One of its products, known as “Volume Support”, allowed cryptocurrency projects to choose the amount of artificial daily trading activity they wanted generated across selected exchanges.
Automated bots would then repeatedly buy and sell the same cryptocurrencies. The transactions created the impression that the assets had higher trading volumes and greater market interest, although they had no legitimate commercial purpose.
Prosecutors said the bots generated millions of dollars in daily wash trades involving about 60 cryptocurrencies.
The investigation began with an undercover operation centred on NexFundAI, a fictional cryptocurrency company created by U.S. law enforcement. Investigators launched a website for the project and issued an Ethereum-based NexFundAI token, which traded on the decentralised exchange Uniswap before authorities disabled it.
Undercover agents approached market makers while posing as representatives of the supposed project. During conversations with the undercover NexFundAI team, Zhou described how MyTrade carried out simultaneous purchases and sales of the same asset.
“MyTrade MM does self-trades a buy and a sell in the same second,” Zhou said, according to prosecutors.
He also told the undercover agents that MyTrade’s volume bot could carry out “pump and dumps”. In another statement cited by the Department of Justice, Zhou said the purpose was to draw in external buyers because “we have to make [the other buyers] lose money in order to make profit.”
The Department of Justice said MyTrade was still providing its Volume Support service to dozens of clients as of 1 October 2024.
Under the terms of Zhou’s guilty plea, MyTrade agreed to stop offering Volume Support and permanently deactivate the bots responsible for creating the artificial transactions. The company was also required to publish a notice on its website acknowledging that the service was unlawful.
“Volume support is a form of wash trading and illegal under the laws of the United States,” the notice states.
The case was prosecuted by the U.S. Attorney’s Office for the District of Massachusetts, with assistance from the FBI’s Boston Division.
Zhou’s sentence forms part of a wider U.S. enforcement effort targeting misleading conduct in cryptocurrency and event-contract markets. In July, former U.S. Representative George Santos settled a Commodity Futures Trading Commission case involving trades on the prediction market Kalshi.
Santos agreed to return $17,569.98 in gains, pay a $17,500 penalty and accept a three-year ban from trading on platforms registered with the CFTC. The regulator accused him of making misleading public statements while betting on whether he would attend President Donald Trump’s State of the Union address. Santos neither admitted nor denied the findings.
Authorities outside the United States are also increasing their scrutiny of alleged market manipulation. South Korean officials examined more than 40 suspected unfair-trading cases during the first two years of the country’s Virtual Asset User Protection Act.
More than 30 cases were reported or referred to investigative agencies, while 25 suspects were identified. The average alleged unlawful gain was about 1.4 billion won, equivalent to roughly $940,000, per case.
The Zhou case underlines that describing artificial trading activity as market making or volume support does not protect firms from accusations of illegal wash trading and fraud. It also demonstrates how U.S. investigators can enter digital-asset markets directly through undercover operations to identify suspected misconduct.
