After the Federal Bureau of Investigation (FBI) led a sting operation, the US government fined UAE-based market-making firm CLS Global $428,000 on April 2, 2025, for engaging in a wash trading scheme that artificially inflated the trading volume of digital assets on US-based exchanges.
As stated by the Commodity Futures Trading Commission (CFTC) Enforcement Director Ian McGinley, “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.”
Moreover, the court has sentenced the market maker to three years of probation, during which time it cannot participate in cryptocurrency markets accessible to US investors.
Notably, this penalty comes after CLS Global pleaded guilty to wash trading on Uniswap, a decentralized crypto exchange, in January this year. The plea deal included a fine of $428,000, comprised of seized cryptocurrency and the fine that the market maker will have to pay to 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. pic.twitter.com/tK2Oa9AHj5
— AIDog (@AIDOG_AI) April 4, 2025
Additionally, the charges brought against CLS Global stem from a September 2024 indictment alleging one count of conspiracy to engage in market manipulation and wire fraud, along with an additional count of wire fraud.
The market maker executed more than 80,000 wash trades from February to September 2021. The Department of Justice (DOJ) has accused the company of transactions that simulate genuine market activity; however, the buyer and seller are the same party.
CLS Global conducted wash trades to boost visibility and create a sense of demand for certain tokens, thereby misleading market participants.
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CLS Global Artificially Inflated Trading Volumes on Uniswap to Meet Exchange Listing Requirements
CLS Global’s shady actions tie to its involvement with NexFundAI, a crypto company and an Ethereum-based token that the FBI created as part of its operations targeting market manipulation.
As part of the sting operation, NexFundAI approached CLS Global to help them meet exchange listing requirements, to which the market maker agreed and artificially inflated trading volumes on Uniswap.
The market maker used an algorithm to mimic natural buying and selling by self-trading across multiple wallets. Furthermore, the DOJ noted that CLS Global and its US-based affiliate, Clarity Ventures, intentionally misrepresented their trading activities to the exchange operators.
CLS Global promoted itself as a liquidity provider and a market maker that could help tokens gain traction during the initial trading phases. In addition with their claim of using proprietary algorithms to maintain price stability and volume generation.
This case marks one of the first times a foreign crypto market maker has been penalized by US-based regulators for activity on US-based exchanges, marking a shift towards extraterritorial enforcement in the crypto space.
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Key Takeaways
CLS Global fined $428K for executing 80,000 wash trades.
CLS Global artificially inflated trading volumes on Uniswap to meet exchange listing requirements.
The FBI created NexFundAI, a crypto company and an Ethereum-based token, as part of its operations targeting market manipulation.
