A federal court in Boston has fined UAE-based crypto financial firm CLS Global over $428,000 for its role in a crypto market manipulation scheme. The company was also banned from offering services in the United States for three years as part of its sentencing on April 2, 2025.
The charges stem from a sting operation by U.S. law enforcement, which involved a fake token called NexFundAI created by the FBI to catch fraudulent activity in the crypto industry. The case adds to growing regulatory crackdowns on illegal practices in the digital asset space, particularly wash trading.
CLS Global Pleads Guilty to Market Manipulation
CLS Global, registered in the United Arab Emirates and operating as a crypto market maker, pleaded guilty earlier this year to one count of conspiracy to commit market manipulation and one count of wire fraud. The company admitted to working with undercover agents posing as token developers to artificially inflate the trading volume of the fake crypto token NexFundAI.
According to the Massachusetts U.S. Attorney’s Office, CLS Global agreed to provide “market maker services” that included creating fake volume to make the token appear more popular than it actually was. This type of manipulation is designed to attract unsuspecting investors by giving a false impression of demand.
The FBI’s Clever Trap: NexFundAI
The FBI launched NexFundAI in May 2024 as part of a broader effort to uncover fraudulent practices in crypto trading. CLS Global was one of at least three firms that took the bait, agreeing to participate in illegal activities to promote the fake token.
Other companies targeted in the sting included ZM Quant Investment, linked to Hong Kong, and Gotbit Consulting, linked to Russia. The U.S. Securities and Exchange Commission (SEC) filed additional fraud charges against all three firms and named CLS Global employee Andrey Zhorzhes as a co-defendant in October 2024.
The Team Behind CLS Global
Founded in 2017, CLS Global positioned itself as a provider of professional market-making solutions and trading consulting services. CEO Filipp Veselov, who previously worked at the Russian crypto exchange Latoken, stated that the company was created to fill a gap in the market for high-quality crypto trading services.
CLS Global’s Chief Revenue Officer, Pavel Singaevskii, also has a history in the crypto space, having worked at Stex, a platform that suddenly shut down in 2023 without any warning to users. Despite the legal troubles, CLS Global’s X (formerly Twitter) account remains active with over 110,000 followers at the time of this article.
Why Wash Trading Is a Big Problem in Crypto
Wash trading is an illegal tactic where traders buy and sell the same asset repeatedly to give the appearance of high trading volume. This tricks other investors into thinking a token is more in demand than it really is, creating a false sense of popularity.
The practice not only misleads retail investors but also damages the credibility of the entire crypto market. According to a January 2025 report by blockchain analytics firm Chainalysis, at least $2.6 billion worth of crypto volume was identified as wash trades—about 2% of daily trading volume.
However, some studies suggest the problem is much worse. The U.S. National Bureau of Economic Research (NBER) reported in 2022 that up to 70% of trading volume on unregulated crypto exchanges could be linked to wash trading.
What’s Next for CLS Global?
As part of its punishment, CLS Global will not be allowed to operate within the U.S. for the next three years. The company has also agreed to pay a fine of $428,059. While the financial penalty may seem small for a global crypto firm, the reputational damage could have long-lasting effects.
With regulators increasingly focused on cracking down on fraudulent activity in the digital asset space, this case sends a strong message to other crypto firms engaging in or facilitating dishonest practices.
The sentencing of CLS Global shows that U.S. regulators are serious about cleaning up the crypto market. By launching a smart sting operation with NexFundAI, the FBI and SEC successfully exposed companies willing to manipulate the market for profit. As enforcement ramps up, firms operating in the crypto space must tread carefully—because the days of unchecked fraud may finally be coming to an end.
