Gotbit founder to forfeit $23 million in stablecoins as part of plea deal in market manipulation case

Gotbit founder Alex Andryunin signed a plea deal with the U.S. Attorney for the District of Massachusetts, Leah B. Foley, on Wednesday in connection to wire fraud and crypto market manipulation charges.

Andryunin, a Russian national, agreed to forfeit a total of $22.9 million in stablecoins — $18.7 million worth of USDT and $4.2 million of USDC — as part of the deal, alongside other assets connected to the offense, according to a court document seen by Law360. While the stablecoins belong to Gotbit, they are solely controlled by Andryunin on the defunct cryptocurrency consulting and market-making firm's behalf.

Andryunin will plead guilty to one count of conspiracy to commit wire fraud and market manipulation, along with two additional counts of wire fraud, the letter states. For the first count, he was facing up to five years in prison, three years of supervised release, fines, restitution and forfeiture. For the two other counts, Andryunin faced up to 20 years in prison, three years of supervised release, fines, restitution and forfeiture.

However, following the plea agreement, the U.S. Attorney agreed to recommend a sentence of up to 24 months with 36 months of supervised release and no fine in light of the forfeiture, with restitution to be determined at sentencing. Andryunin also agreed not to participate in any "issuance, purchase, offer or sale of any cryptocurrency on any cryptocurrency trading platform" in the United States as a condition of any supervised release.

The court is not required to follow the sentencing guidelines or the recommendations and will ultimately decide the sentence after considering the agreement. Andryunin cannot withdraw his guilty plea, and the court's decision will be final.

Andriunin's extradition

Andriunin was extradited to the United States in February for allegedly manipulating cryptocurrency markets on behalf of clients and indicted by a federal grand jury shortly afterward.

The Gotbit executive was arrested in Portugal last October. Around the time of Andriunin's arrest, prosecutors alleged several individuals created crypto firms, lied about their cryptocurrencies, and then carried out wash trades to create the illusion of trading activity and increase the price of certain tokens.

"Specifically, the scheme caused reasonably foreseeable pecuniary harm to dispersed market participants who purchased cryptocurrencies at fraudulently inflated prices and lost money after those prices later dropped, once the prices of those cryptocurrencies were no longer artificially inflated," the U.S. Attorney wrote in Wednesday's letter. "However, neither these losses nor the gain that resulted from the offense can reasonably be estimated."

Besides Gotbit, the firms ZM Quant, CLS Global and MyTrade were also implicated last year following a sting operation by the FBI that included the unprecedented step of creating its very own cryptocurrency, NexFundAI, to identify the alleged fraudsters. U.S. prosecutors charged the four crypto companies and a total of 14 individuals.