MyTrade founder Liu Zhou has been fined $10,000 for operating a cryptocurrency wash-trading service that used bots to generate millions of dollars in artificial daily volume across approximately 60 tokens, according to the U.S. Attorney’s Office for the District of Massachusetts. U.S. District Judge Angel Kelley imposed the sentence after Zhou pleaded guilty to conspiracy to commit market manipulation and wire fraud.
The sentencing announcement lists a $10,000 fine but does not identify a prison term, supervised release, restitution, or forfeiture imposed on Zhou. That makes the outcome notable because the conspiracy charge carried a maximum of five years in prison, up to three years of supervised release, and a fine of up to $250,000 or twice the gross gain or loss caused by the offense.
The Justice Department did not explain why the final sentence was limited to the disclosed fine. Zhou pleaded guilty in October 2024, the same month the government announced its wider enforcement operation, and MyTrade was required to stop its wash-trading service and permanently deactivate the bots. Those facts may have been relevant at sentencing, but the public announcement does not provide the court’s calculation or identify any cooperation reduction. The sentencing outcome should therefore be reported without attributing a reason that has not been disclosed.
Clients Could Order Artificial Volume Through a Dashboard
MyTrade provided services through its MyTrade MM website and application. Clients could open a dashboard, select a token and exchange, and specify how much artificial daily trading they wanted. The company called the product “Volume Support,” but Zhou admitted that the activity consisted of wash trades generated by bots.
A wash trade occurs when the same trader, or coordinated traders, repeatedly buy and sell an asset without taking genuine market risk. The transactions create the appearance of demand and liquidity even though ownership has not meaningfully changed. Other investors may then interpret the reported volume as evidence that the asset has an active market and can be bought or sold without difficulty.
This distinction separates legitimate market making from MyTrade’s admitted conduct. A market maker normally posts bids and offers, assumes inventory risk, and facilitates transactions between independent buyers and sellers. MyTrade’s bots instead created matched activity for the purpose of changing how the market appeared to outsiders. The service gave token promoters an automated mechanism for producing the volume they wanted rather than responding to genuine orders.
The manipulation targeted a metric that retail traders frequently use when assessing smaller tokens. Trading volume can provide information about liquidity and market participation, but volume loses that value when transactions are generated by coordinated accounts. A token may appear active on an exchange while having few independent buyers and little usable liquidity once the artificial trading stops.
The FBI Created Its Own Token to Catch the Market Makers
MyTrade was exposed through Operation Token Mirrors, an undercover investigation in which the FBI created a purported cryptocurrency company called NexFundAI. The operation included a website and an Ethereum-based token that traded on Uniswap before law enforcement disabled it.
Agents posing as NexFundAI promoters approached firms offering crypto market-making services. During recorded discussions, Zhou explained that MyTrade could conduct self-trades by placing a purchase and sale in the same second. He also said the volume bot could support pump-and-dump schemes, where artificial activity attracts outside buyers before insiders sell their holdings.
“We have to make the other buyers lose money in order to make profit,” Zhou told the purported promoters.
The statement helped prosecutors show that the purpose extended beyond maintaining an orderly market. MyTrade was looking for unrelated buyers who could be induced to trade against activity that appeared genuine. As of October 1, 2024, the company was providing its volume service to dozens of clients.
The wider operation initially produced charges against 18 individuals and entities associated with token projects and four firms offering market-making services. Authorities also announced the seizure of more than $25 million in cryptocurrency and the shutdown of bots serving approximately 60 tokens. Those operation-wide figures should not be treated as funds seized from Zhou personally.
The Securities and Exchange Commission brought related civil cases against Gotbit, CLS Global, ZM Quant, Saitama, and Robo Inu. MyTrade and Zhou were handled through the criminal proceeding described by the Justice Department. The parallel SEC cases against three crypto market makers concerned similar allegations that bots were used to create trades with no economic purpose.
MyTrade’s $10,000 Fine Is Lower Than Other Operation Token Mirrors Penalties
Zhou’s disclosed penalty is smaller than the resolutions announced for two other market makers caught in the operation, although the defendants, charges, admitted conduct, and financial circumstances were not identical. CLS Global was ordered to pay $428,059 through a combination of a fine and seized cryptocurrency. The company also received three years of probation and was prohibited from participating in U.S. cryptocurrency markets.
Gotbit founder Aleksei Andriunin received eight months in prison followed by one year of supervised release. Gotbit was ordered to forfeit approximately $23 million in cryptocurrency and cease operating. The company admitted that it created artificial price and volume for clients including Saitama and Robo Inu, while employees described using several accounts to make the transactions harder to identify on a public blockchain.
The Gotbit case has since become part of a wider series of proceedings targeting market-making businesses, with prosecutors pursuing executives connected to several wash-trading operations. These resolutions show that enforcement outcomes can range from fines and operating restrictions to forfeiture and imprisonment.
Comparing those penalties with Zhou’s $10,000 fine raises a fair question about deterrence, but the Justice Department’s current announcement does not provide enough information to answer it. It does not disclose Zhou’s gain from the conspiracy, an agreed sentencing range, his ability to pay, a government sentencing recommendation, or whether confidential cooperation affected the result.
Artificial Volume Can Survive in Public Blockchain Markets
MyTrade’s operation also demonstrates why public transaction records do not automatically prevent manipulation. Blockchain transfers can be visible while control over the participating wallets remains concealed. If one operator controls several addresses, a sequence of apparently separate transactions can still be economically equivalent to trading with itself.
Similar concerns have appeared outside the criminal cases. A Columbia University study estimated that approximately 25% of historical Polymarket volume showed signs of wash trading. That research concerned a separate platform and was an academic estimate rather than a government finding, but it illustrates the analytical difficulty of distinguishing coordinated wallet activity from independent trading.
Effective surveillance therefore requires more than counting transactions. Exchanges and analytics providers must examine wallet funding sources, order timing, recurring counterparties, common beneficial control, trading patterns, and whether participants repeatedly return to the same economic position. Self-trade prevention controls can stop orders from the same account matching, but they may not detect coordinated activity spread across several accounts or venues.
Wash trading is also not unique to digital assets. The UK Financial Conduct Authority previously fined and banned a Stifel market-making trader for wash trades in listed shares. What changes in crypto is the ease with which bots can operate continuously across tokens, wallets, and trading platforms with limited information about the parties controlling each account.
The Case Targets Fraud Rather Than Technology
Operation Token Mirrors was the first U.S. criminal operation to charge crypto financial services firms with wash trading and market manipulation. It followed other prosecutions testing how existing fraud and manipulation laws apply to digital markets, including the conviction of Avraham Eisenberg for manipulating Mango Markets. Eisenberg’s Mango Markets convictions were vacated by Judge Arun Subramanian on 23 May 2025 (improper venue, plus the court rejected the theory that he could make false representations to an automated smart contract.
The MyTrade case does not establish that automated market making or volume-support agreements are inherently illegal. The decisive conduct was using coordinated trades to create false market signals and attract buyers who did not know the displayed activity was manufactured. Calling the service “Volume Support” did not change its economic purpose.
As part of Zhou’s guilty plea, MyTrade was required to place a disclaimer on its website stating that volume support is wash trading and illegal under U.S. law. Its bots were deactivated, ending a service that had generated millions of dollars in daily sham transactions. The $10,000 fine is the final disclosed penalty for Zhou, but the investigation’s larger consequence is that firms selling artificial liquidity as a routine crypto service are now facing criminal prosecution.