Some made a profit, some incurred losses, and some were caught.

Written by: Eric, Foresight News

A sting operation conducted two years ago has recently come to a conclusion.

According to an announcement from the U.S. Department of Justice, executives from Gotbit, Vortex, Antier, and Contrarian who were arrested in 2025 or extradited back to the U.S. from Singapore are gradually being put on trial, most having pleaded guilty under overwhelming evidence.

And the evidence they could not refute were their own words.

In October 2024, the Federal Bureau of Investigation (FBI) announced an enforcement action codenamed "Operation Token Mirrors," targeting the cryptocurrency sector. Unlike past passive investigations, this time the FBI chose to "strike first": they faked a project called NexFundAI and actively reached out to market makers to inquire whether they could help manipulate the market.

The outcome showed that these "market makers" unanimously chose to cooperate. The boasting from those trying to showcase their abilities would later send them one by one into prison. The FBI's action exposed the gray industrial chain behind "fake trading volume" and "chart manipulation" in the crypto market, allowing many to finally see how the "excitement" around many coins came about.

In 2024, the FBI's Boston office led the registration of a fake company, created a professional website and white paper, wrapping the baiting project NexFundAI as a combination of AI and finance, claiming it could "generate passive income through AI investment." The total supply of the project's token was 10 billion, completely standard in the market.

After listing the token on Uniswap and adding liquidity, undercover agents, posing as the project team, proactively contacted several well-known market-making companies, clearly stating their demands for increasing trading volume and creating activity. As a result, nearly all contacted companies agreed. The FBI recorded everything and traced the flow of funds through blockchain technology, firmly securing the evidence.

According to information released by the U.S. Department of Justice, the market makers revealed the old tricks of this gray industry during their communications with the undercover agents.

One of the defendants, ZM Quant, showed undercover agents a "trading bot" capable of generating trading volume on Telegram, describing how ZM Quant could "trade ten to twenty times per minute" to "increase volume" and "inflate prices," as well as how to use multiple trading wallets to avoid trades appearing "fake."

CLS employee Andrey Zhorzhes was even more straightforward:

• "We have an algorithm that can basically trade autonomously, buying and selling stocks."
• "The purpose of increasing trading volume is to... make the tokens look natural and active, thus attracting people to trade."
• "It's hard to track... We've been doing this for many clients."
• "I know this is fake trading and that people may not be happy about it."

The above two companies were just "creating activity," while MyTrade took directly taking advantage to a whole new level. According to MyTrade founder Liu Zhou, the purpose of the fake trading includes "showing sustained trading activity;" "creating enough trading volume to exempt cryptocurrency exchanges from listing fees" and "executing a pump and dump." Liu Zhou said the secondary market's goal was to find other buyers in the community, those you don't know or care about, because "we have to make (other buyers) lose money to make profits."

Based on an announcement from the U.S. Department of Justice at the end of March, a total of 10 people have been prosecuted or have pleaded guilty in the past two years, including the notorious executives from Gotbit. Additionally, several foreign nationals from Russia, Serbia, and India have also been prosecuted.

Ironically, the FBI's recent sting operation not only caught some truly big fish but also snagged some smaller ones.

Due to the realistic disguise of NexFundAI and the cooperation of the manipulators, the fake trading charts attracted quite a few real-money investors. When the operation ended and liquidity was withdrawn, however, these investors faced real losses on the blockchain. Initially, these users did not know who to turn to for protection until the Department of Justice released relevant information. In no time, the FBI, which faced public outcry, even opened a victim compensation channel to return the funds. This might be the most unique "government refund" in crypto history.

More ironically, on the same day the Department of Justice announced the findings, someone copied the NexFundAI contract, launched a shanzhai coin to ride the wave, and made $127,000 in a day using the same tactics that the FBI used to "lay bait."

In 2025, the FBI conducted a similar operation, once again exposing some traders through a project named Lexobit, with TRM Labs, which assisted the FBI in collecting on-chain evidence, releasing some details.

In this operation, Gotbit fell for it again. Investigators stated that out of 1,221 transactions in a certain project, 1,209 transactions (99%) could be traced back to Gotbit's wallet. In June 2025, the court confiscated 1.2 million USDT in assets from Gotbit executive Antoine Tsao's address, which was the payment address used by undercover agents. In conversations with investigators, Antoine Tsao explicitly stated: we do not make moral judgments.

The "Operation Token Mirrors" plan has not yet stopped, and further exposure of the hidden hands behind the dramatic rises and falls may continue.