Federal prosecutors and the FBI have charged 15 people and three cryptocurrency companies—Gotbit, ZM Quant, and CLS Global—with fraud and market manipulation. This case involved "pump and dump" schemes, where token prices were artificially inflated and sold off, leaving investors with worthless assets. The FBI even created a fake crypto company, NexFundAI, to catch the suspects. Over $25 million in cryptocurrency has been seized, with several arrests made and guilty pleas entered.
What steps should be taken to prevent such fraud in the rapidly evolving crypto space?