After a new investigation by the FBI, the cryptocurrency financial firm admitted its guilt

By Nat Raymond

BOSTON (Reuters) – A cryptocurrency financial services firm that offered to help market a digital token created by an FBI order to help detect fraud in the crypto sector agreed on Tuesday to plead guilty to U.S. charges.

CLS Global, registered in the United Arab Emirates, was one of three companies and 15 individuals indicted by federal prosecutors in Boston last year in an undercover investigation focused on crypto.

The probe, dubbed “Operation Token Mirrors,” marks the first time the FBI has conducted its own digital token as well as a fake cryptocurrency company to help catch and arrest fraudsters in the market.

An attorney for CLS did not respond to a request for comment.

He said the company has always taken its compliance obligations seriously and strives to ensure its operations are separate from the US market and regulatory systems.

Prosecutors said that CLS was one of three market makers who offered illegal trading services to cryptocurrency companies, and during the operation, they agreed to help manipulate the market of the FBI-backed NexFundAI token, which operates on the Ethereum blockchain.

In court papers, the company admitted that it agreed to provide services for the NexFundAI token, which included sham trades, called sham trades, designed to artificially increase the trading volume or value of the asset.

Prosecutors said Tuesday that CLS will pay $428,059 after pleading guilty to two charges related to defrauding cryptocurrency trading volume.

The company will be barred from participating in cryptocurrency transactions on trading platforms available to US investors or providing services to US cryptocurrency customers, prosecutors said.

CLS Global has committed to making annual certifications about its business practices and has agreed to settle related civil charges with the US Securities and Exchange Commission.

(Reporting by Nate Raymond in Boston; Editing by Richard Chang)