A crypto “market maker” promising Volume Support turned out to be, according to U.S. prosecutors, a wash-trading operation with a friendlier label.
- Liu Zhou pleaded guilty to conspiracy to commit market manipulation and wire fraud.
- MyTrade allegedly sold fake volume across about 60 cryptocurrencies.
- An FBI sting using NexFundAI helped expose the operation.
- MyTrade must stop Volume Support, deactivate its bots, and publish a disclaimer calling wash trading illegal.
The case is a blunt reminder that “liquidity support” is not a magic phrase that makes fraud disappear. If the business model is to fabricate trading activity and mislead the market, that is not market making. That is deception with a spreadsheet.
According to the Department of Justice, Zhou, the founder and primary operator of MyTrade, pleaded guilty in Boston to conspiracy to commit market manipulation and wire fraud. The case centers on a scheme prosecutors say generated millions of dollars’ worth of daily wash trades for client crypto projects.
Wash trading is simple in concept and rotten in practice. It means repeatedly buying and selling the same asset to create the illusion of real demand and real liquidity when neither may exist. In crypto, where volume is often used as a proxy for credibility, fake activity can make a thin or dying token look active enough to attract real buyers.
MyTrade allegedly sold that illusion as a product. The company was later described in reporting on the case as the MyTrade founder fined $10K over crypto wash trading.
Through its MyTrade MM website and application, the company offered a feature called Volume Support. Prosecutors say clients could choose how much daily artificial trading activity they wanted, and MyTrade’s bots would generate it across specified exchanges for approximately 60 cryptocurrencies. That is not liquidity provision. That is industrialized fakery dressed up as a service.
The DOJ says Zhou is 39 and a Canadian citizen and Chinese national. He was charged alongside 17 alleged co-conspirators in October 2024. The U.S. Attorney’s Office for the District of Massachusetts prosecuted the case with assistance from the FBI’s Boston Division, and U.S. District Judge Angel Kelley in Boston scheduled sentencing for Feb. 27, 2025.
What makes this case especially ugly is the language prosecutors say Zhou used when speaking with undercover agents. According to the DOJ, Zhou described MyTrade MM this way:
“MyTrade MM does self-trades - a buy and a sell in the same second, ”
He also allegedly said the bot could execute “pump and dumps, ” the old scam in which hype drives a price up before insiders cash out. In another DOJ-cited statement, Zhou said:
“we have to make [the other buyers] lose money in order to make profit.”
That is not some misunderstood growth strategy. That is a confession-level description of predation.
The scheme was exposed through an undercover operation involving NexFundAI, a purported cryptocurrency company created by law enforcement. Investigators launched an Ethereum-based NexFundAI token, listed it on Uniswap as part of the sting, and later disabled it. For a closer breakdown of how similar tactics played out in a different enforcement action, see FBI Charges CLS Global for Uniswap Wash Trading: A Crypto.
That matters because crypto has long given bad actors a lot of room to hide behind shiny language: “market making, ” “community growth, ” “ecosystem support, ” “volume support.” Sometimes legitimate market makers really do help markets function by providing liquidity and tighter spreads. But when the service is designed to manufacture activity rather than facilitate real trading, it stops being support and starts being fraud with better branding.
As of Oct. 1, 2024, the DOJ says MyTrade MM was still providing Volume Support to dozens of clients. That suggests the operation was not some dusty relic from the wildest days of the last cycle. It was active, ongoing, and apparently normal enough for the people involved to keep selling it.
As part of the plea, MyTrade agreed to stop offering Volume Support and permanently deactivate its wash-trading bots. The company also has to publish a notice stating:
“Volume support is a form of wash trading and illegal under the laws of the United States.”
That’s a rare moment of legal poetry, if you can call being forced to admit your own scam “poetry.” More importantly, it shows how regulators are framing the conduct: not as harmless token promotion, but as market manipulation that distorts prices, misleads traders, and pollutes the data everyone else relies on.
This is the part crypto people should actually care about. Fake volume doesn’t just look bad on a dashboard. It can lure in real buyers, distort price discovery, and make a weak project seem healthier than it is. Retail traders wind up stepping into a staged set while thinking they’re walking into a market.
That is why the distinction between legitimate market making and fake “volume support” matters so much. Real market makers can help an asset trade more cleanly. Fraudulent volume services do the opposite: they fabricate the appearance of interest so a token can borrow credibility it never earned.
The MyTrade case also fits a broader enforcement trend. Regulators are getting less interested in excuses and more interested in the mechanics: who asked for the fake volume, who generated it, what the bots did, and what the people involved said when they thought nobody was listening. In crypto, pseudonymity and offshore structures are useful until they meet a subpoena and some decent undercover work.
For an industry that loves to preach decentralization, this should be an embarrassment. Decentralization is supposed to reduce gatekeepers and hidden middlemen, not give scammers a shinier way to lie. And “market making” is a real function in many markets, but it is not a get-out-of-jail-free card for people selling fake liquidity with a straight face.
The bottom line is simple: if your “support” service exists to create the illusion of demand, U.S. prosecutors are no longer treating that as a quirky gray area. They are treating it as fraud. About time.
For a broader look at how surveillance tools are used to spot these patterns, the mechanics of detection are laid out in Market Abuse & Trade Surveillance: How to identify Wash. And for another example of regulators using a fake token sting to smoke out bad actors, there’s the earlier breakdown of FBI’s Fake Token NextFundAI Nabs CLS Global in Wash Trading.
Key takeaways
-
What did MyTrade allegedly do?
Prosecutors say it sold artificial trading activity through a service called Volume Support, using bots to fake volume across about 60 cryptocurrencies. -
Why is wash trading illegal?
It misleads traders about real demand and liquidity. In crypto, that can distort prices and lure people into buying assets that are far less active than they appear. -
How was the scheme exposed?
Law enforcement used an undercover operation centered on NexFundAI, a fake crypto company with an Ethereum-based token that traded on Uniswap before being disabled. -
What evidence suggests intent?
According to the DOJ, Zhou allegedly described self-trades, pump-and-dumps, and making “other buyers” lose money in order to profit. -
What happens to MyTrade now?
MyTrade must stop Volume Support, permanently deactivate its bots, and post a notice saying volume support is wash trading and illegal under U.S. law. -
Why should traders care?
Fake volume can make a weak project look liquid and credible when it is neither. That can distort decisions and pull real money into a rigged setup.
Further reading
A few related pieces for anyone tracking how fake volume gets exposed and punished.
