CLS Global FZC LLC, a financial services firm recognized as a "market maker" in the cryptocurrency sector, faced sentencing in federal court in Boston today. The firm was charged with fraudulent manipulation of cryptocurrency trading volumes.
The court decreed that CLS Global must pay $428,059, covering both a fine and seized cryptocurrency. Additionally, the court placed CLS Global on probation for three years, during which they must refrain from engaging in U.S. cryptocurrency markets. In January 2025, CLS Global pleaded guilty to conspiracy to commit market manipulation and wire fraud, as well as wire fraud itself. The criminal charges were initially filed in September 2024.
Operating out of the United Arab Emirates and staffed with over 50 non-U.S. employees, CLS Global offered "market making" and similar services to U.S. cryptocurrency investors. An undercover law enforcement probe targeted CLS Global for "wash trading," a deceptive practice to boost investor interest. The investigation created NexFundAI, a fictional crypto company with a website and token on the Uniswap exchange, which was later disabled.
CLS Global agreed to provide services that involved "wash trading" to make the NexFundAI token appear attractive to potential buyers. During video conferences in mid-2024, a CLS Global employee described their algorithmic trading tactics aimed at creating the illusion of genuine market activity. The employee admitted the practice was "wash trading" and noted, "I know that it’s wash trading and I know people might not be happy about it."
The employee's proposal included a "Market Making proposal" showcasing CLS Global's trading dashboard. CLS Global employees executed trades of the NexFundAI token on Uniswap, producing trading reports through a "volume generation algorithm."
According to the plea deal, CLS Global must avoid U.S.-based cryptocurrency transactions and clients, making annual certifications of compliance. A related civil enforcement action by the Securities & Exchange Commission, accusing CLS Global of securities law violations, concluded in a separate agreement. Funds paid by CLS Global will be accredited in both the criminal and SEC settlements.
The announcement came from United States Attorney Leah B. Foley and Jodi Cohen, Special Agent in Charge of the FBI's Boston Division. Assistant U.S. Attorneys Christopher J. Markham and David M. Holcomb are prosecuting, with Assistant U.S. Attorney Carol Head managing asset forfeiture.
The indictment details are allegations, and any remaining defendant remains innocent until proven guilty in a court of law.
