Following a sting operation led by the FBI, the US government has fined CLS Global, a market-making firm from the UAE, $428,000 on April 2, 2025, for their involvement in a wash trading scheme. This fraudulent activity was aimed at artificially inflating the trading volume of digital assets on US exchanges.

According to Ian McGinley, the Enforcement Director for the CFTC, “Wash trading undermines trust in the marketplace and harms both investors and legitimate market participants. This case demonstrates that the CFTC will not tolerate such manipulation—regardless of where a firm is located.”

In addition to the fine, the firm has been sentenced to three years of probation during which it cannot engage in cryptocurrency markets accessible to US investors.

Interestingly, this penalty follows CLS Global’s earlier guilty plea related to wash trading on Uniswap, a decentralized exchange, in January of this year. The agreement included the same fine, which comprises seized cryptocurrency along with an additional monetary penalty imposed by the US government.

“CLS Global hit with a $428K fine for wash trading! The crackdown on crypto fraud continues, highlighting the need for transparency and regulation.”
— AIDog (@AIDOG_AI) April 4, 2025

Moreover, CLS Global faced charges stemming from a September 2024 indictment. The charges included a count of conspiracy to engage in market manipulation and an additional count of wire fraud. The market maker executed more than 80,000 wash trades between February and September 2021, with the DOJ accusing them of carrying out transactions that mimicked genuine market activity while the buyer and seller were effectively the same entity.

CLS Global was involved in executing these wash trades to enhance visibility and create an illusion of demand for specific tokens, thereby deceiving market participants.

CLS Global’s Role with NexFundAI

CLS Global’s actions relate to its collaboration with NexFundAI, a crypto company and Ethereum-based token developed by the FBI targeting market manipulation. As part of this operation, NexFundAI engaged CLS Global to assist in satisfying exchange listing requirements, leading to the artificial inflation of trading volumes on Uniswap.

The market maker utilized algorithms to simulate natural buying and selling actions through self-trading across multiple wallets. Furthermore, the DOJ indicated that CLS Global and its US affiliate, Clarity Ventures, purposefully misrepresented their trading activities to exchange operators.

This case is notable as it represents one of the first instances of a foreign crypto market maker being penalized by US regulators for actions on US exchanges, indicating a shift towards extraterritorial enforcement within the cryptocurrency sector.