Crypto Market Maker MyTrade Founder Fined $10K for Wash Trading Scheme Targeting 60 Cryptocurrencies

Justice Department Secures Conviction Against MyTrade Founder

Liu Zhou, the 41-year-old founder of cryptocurrency market maker MyTrade, was sentenced to pay a $10,000 fine with no prison time for operating an illegal wash trading service across approximately 60 different digital assets, according to the Justice Department, as reported by Decrypt. Zhou, a Canadian citizen of Chinese nationality, appeared before U.S. District Judge Angel Kelley in Boston federal court this week to receive his sentence. He had previously entered guilty pleas to conspiracy to commit market manipulation and wire fraud in October 2024, following charges that also named 17 co-conspirators and entities involved in the same operation.

Inside MyTrade’s “Volume Support” Manipulation Service

MyTrade conducted its illegal operations with striking openness, marketing a service called “Volume Support” that allowed cryptocurrency traders and projects to artificially boost trading volumes on their chosen assets. The service operated through a straightforward web dashboard where clients could specify their desired amount of daily fake trading volume. Once ordered, automated trading bots would execute rapid cycles of simultaneous buy and sell orders for the same asset, creating the false impression of genuine market demand and interest. This scheme generated millions of dollars in counterfeit trading activity daily across named cryptocurrency exchanges, misleading investors about the true liquidity and interest in specific cryptocurrencies.

Zhou himself was remarkably transparent when discussing the operation with individuals he believed were potential customers. According to the Justice Department, as reported by Decrypt, Zhou explained that MyTrade specialized in “self-trades—a buy and a sell in the same second,” and described how the platform could facilitate pump-and-dump manipulation schemes designed to artificially move prices. Most disturbingly, Zhou articulated the core objective of the scheme: to systematically extract money from unsuspecting market participants. He stated that the operation needed to “make [the other buyers] lose money in order to make profit,” revealing how the scheme was designed to concentrate gains among insiders at the expense of retail investors.

Federal Sting Operation Uncovers Broader Conspiracy

To investigate the wash trading industry, federal law enforcement conducted an elaborate undercover operation designed to document the full scope of illegal market manipulation services. Investigators created NexFundAI, a completely fabricated cryptocurrency company that included a functional website and an Ethereum-based token listed on Uniswap to appear legitimate. This fictional entity was used to contact cryptocurrency market makers and solicit their market manipulation services. By maintaining contact and secretly recording conversations, authorities documented the extent of illegal schemes actively being marketed by these firms. The investigation led to charges against 18 individuals and entities in October 2024, including other prominent market makers such as Gotbit, ZM Quant, and CLS Global.

As part of his plea agreement, Zhou’s company MyTrade MM was required to permanently cease offering the Volume Support product and deactivate all associated trading bots. Additionally, the firm must post a website notice stating that “volume support is a form of wash trading and illegal under the laws of the United States.” Enforcement actions targeting wash trading schemes are critical to building the market infrastructure and investor protections that sustainable cryptocurrency adoption requires.

Source: Justice Department, via Decrypt. Not financial advice.