MyTrade founder sentenced after FBI sting exposes wash-trading scheme

The scheme unraveled following an undercover FBI operation that deployed a fake entity, NexFundAI, to bait market makers. During recorded interactions, Zhou openly detailed how his platform executed simultaneous buy and sell orders for the same asset to create the illusion of legitimate investor interest. He explicitly described the firm’s capability to facilitate 'pump and dump' operations, noting that the ultimate objective was to profit at the expense of external retail buyers.

Following his guilty plea to conspiracy to commit market manipulation and wire fraud, Zhou agreed to permanently deactivate the bots and post a public admission on the MyTrade website acknowledging that his services constituted illegal wash trading. This enforcement action highlights a growing trend of direct federal intervention in digital asset markets, signaling that labeling fraudulent activity as 'market making' provides no legal immunity from criminal fraud charges.