Aleksei Andriunin, the founder of Gotbit Consulting, has agreed to forfeit $23 million in crypto assets as part of a plea deal with US authorities over market manipulation and wire fraud charges. 

The agreement, filed in the District of Massachusetts, comes after a lengthy investigation into Gotbit’s alleged role in artificially inflating cryptocurrency prices and misleading investors.

According to the US Department of Justice (DOJ), Andriunin pleaded guilty to conspiracy to commit wire fraud and market manipulation, along with two counts of wire fraud. Prosecutors accused him of orchestrating a sophisticated scheme that manipulated crypto markets, inflating trading volumes, and deceiving investors through wash trading and price manipulation tactics.

Authorities say Gotbit, a market-making firm that worked with lesser-known crypto projects, engaged in systematic manipulation to create the illusion of demand, attracting unsuspecting buyers who were unaware that much of the trading activity was fabricated. 

The DOJ stated that investors suffered significant losses when these manipulated tokens eventually collapsed in value once the artificial trading stopped.

As part of the plea deal, Andriunin faces up to 24 months in prison, with prosecutors agreeing not to seek a longer sentence. In addition to serving time, he will forfeit more than $23 million in cryptocurrency, including substantial holdings in Tether (USDT) and USD Coin (USDC) across multiple wallets.

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The plea agreement also bars Andriunin from participating in any cryptocurrency trading activities available to US investors for the duration of his supervised release. This restriction aims to prevent further market manipulation schemes and protect retail investors from fraudulent trading practices.

Federal prosecutors have warned that crypto firms engaging in deceptive practices will face legal consequences, reinforcing that market manipulation is not a gray area but a clear violation of US securities and fraud laws. The DOJ emphasized that cases like this serve as a warning to other crypto firms, signaling that authorities will not hesitate to take action against those who attempt to exploit the lack of regulation in digital asset markets.

With the guilty plea secured, Andriunin will now await sentencing. The final amount of restitution to victims will be determined at the sentencing hearing, though the DOJ has already stated that investors suffered losses due to Gotbit’s fraudulent activities.

As for Gotbit, the firm’s involvement in fraudulent trading practices could lead to further regulatory scrutiny on market-making firms operating in the crypto space. While Andriunin’s guilty plea marks the end of his role in the industry, it may not be the last time his firm’s practices come under legal examination.