CLS Global, a cryptocurrency market maker based in Dubai, has consented to plead guilty to charges of wash trading on the decentralized platform Uniswap. This announcement was made by US prosecutors from the District of Massachusetts on January 21, 2025.

As part of the plea agreement, CLS Global will pay $428,059 to the US government, which includes seized cryptocurrency and a fine. Additionally, the firm will be restricted from engaging in cryptocurrency transactions on platforms available to U.S. investors, pending court approval.

The charges against CLS arose from a September 2024 indictment that included one count of conspiracy to commit market manipulation and wire fraud, as well as one count of wire fraud.

FBI Uncovers Wash Trading Scheme

The allegations were triggered by an undercover FBI investigation into wash trading, a fraudulent act that inflates trading volumes to mislead investors.

During the investigation, FBI agents created NexFundAI, an Ethereum-based token traded on Uniswap, uncovering CLS Global’s involvement among other companies in the scheme. Prosecutors noted that CLS was responsible for providing wash trading services for NexFundAI, as evidenced by several recorded video conferences.

One CLS employee allegedly confessed to artificially boosting trading volumes to give NexFundAI a more active trading profile. This behavior involved employing complex algorithms for self-trading, using multiple wallets to mimic genuine trading activity.

Legal Implications

The SEC has initiated a separate civil enforcement action against CLS Global for possible violations of securities laws. Meanwhile, significant changes are anticipated in SEC leadership as the cryptocurrency landscape continues to evolve.