The aftermath of U.S. government charges on Crypto companies
Days after the U.S. government announced unprecedented criminal and civil charges against four Crypto companies for alleged Market manipulation and “wash trading,” Meme Coin projects that relied on those firms are now scrambling to distance themselves from the fallout.
In particular, Token teams that had partnerships with one of the accused companies, the market maker Gotbit, have swiftly issued statements vigorously disavowing the firm they once depended on for liquidity.
Neiro cuts ties with Gotbit
For instance, the Ethereum meme coin project Neiro took to Twitter to announce their decision: "We have halted our relationship with Gotbit, who were our market maker partners. None of the issues involving Gotbit or its employees involve or are relevant to Neiro in any capacity."
Despite the statement from Neiro, members of the Crypto community remain skeptical. On-Chain sleuth ZachXBT criticized Neiro for partnering with Gotbit, especially in light of the ongoing investigation and allegations surrounding the market maker.
BMS severs ties with Gotbit
Other meme coin projects, such as the Tron meme coin BMS, also made public declarations about cutting ties with Gotbit. However, some projects expressed difficulties in completely severing connections with the market maker, as Gotbit still held a significant portion of their token supply.
The team behind BMS stated, "Unfortunately, Gotbit still holds a large portion of our supply, including marketing, treasury, and team Tokens, and they are currently unwilling to return them."
From partnerships to disavowal
Amidst the chaos, even meme coins that had terminated their partnerships with Gotbit prior to the recent charges felt compelled to denounce the company's alleged conduct.
One such project, $BEER, shared on Twitter: "We are aware that Gotbit team is being accused of wash trading and market manipulation. $BEER team has stopped working with Gotbit as a Market Making partner long-time ago and switched to another provider. Thanks for staying with us!"
Accusations against Gotbit
The U.S. government's charges against Gotbit include accusations of illegal wash trades with Digital tokens, pump and dump schemes, and on-demand market manipulation generating fake trading volume. These allegations did not come as a surprise to many in the industry.
Back in 2019, Gotbit co-founder Alexey Andryunin openly discussed the company's business model of manipulating Crypto markets for a fee. He admitted to CoinDesk that their practices were aimed at increasing the perceived legitimacy of obscure tokens.
"The business is not entirely ethical," Andryunin had stated.
As the fallout from the charges continues to ripple through the crypto community, projects are working to distance themselves from Gotbit and salvage their reputations.
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