**FBI Uses Fake Crypto to Nab Market Manipulators**

The FBI has made headlines by creating a fake cryptocurrency, NexFundAI (NEXF), to catch alleged fraudsters involved in market manipulation. According to an Oct. 7 indictment, the FBI presented NEXF as an AI-related crypto security and sought help from scammers to inflate its trading volume. The evidence gathered led to charges against the scammers, marking the first time the FBI has created a cryptocurrency for an investigation.

The agency discovered in July 2024 that MyTrade MM was offering volume guarantees to token issuers. Undercover officers collaborated with MyTrade and LBank exchange to launch NEXF, revealing detailed schemes of wash trading and pump-and-dump tactics. MyTrade founder Liu Zhou has agreed to plead guilty, facing up to five years in prison.

In a broader crackdown, the DOJ announced charges against 18 individuals in various crypto market manipulation cases, highlighting ongoing concerns in the crypto space.