Liu Zhou, the 41-year-old founder of crypto market maker MyTrade, has been fined $10,000 and spared a prison sentence for operating a wash trading service that generated millions of dollars in artificial daily volume across approximately 60 cryptocurrencies.

Zhou, a Canadian citizen and Chinese national, was sentenced on Thursday in Boston federal court by U.S. District Judge Angel Kelley, who imposed no custodial term, Law360 reported. He had pleaded guilty to conspiracy to commit market manipulation and wire fraud after being charged in October 2024 alongside 17 other individuals and entities.

MyTrade marketed the service openly. Clients logged into a dashboard on the MyTrade MM website and specified the daily volume of wash trades they wanted executed on named exchanges — a product the firm called "Volume Support." Automated bots then carried out the trades, repeatedly buying and selling the same asset to inflate apparent trading volume. As of October 2024, the service had dozens of clients. Wash trading has been a persistent concern in cryptocurrency markets, where inflated volume figures can mislead investors into perceiving greater liquidity and demand than actually exists.

Zhou was frank with individuals he believed were prospective customers. MyTrade MM "does self-trades — a buy and a sell in the same second," he told them, adding that its volume bot could be used to run pump-and-dump schemes. The objective, he explained, was to attract "other buyers from the community, people you don't know about or don't care about," because "we have to make [the other buyers] lose money in order to make profit."

FBI Sting Operation

Investigators created NexFundAI, a fictitious crypto company with its own website and an Ethereum-based token that traded on Uniswap until law enforcement disabled it. The token was used to solicit market-making services and record what was offered.

The operation led to charges against 18 individuals and entities in October 2024, including market makers Gotbit, ZM Quant, and CLS Global, as previously reported. The sweep represented one of the most expansive DOJ enforcement actions targeting crypto market manipulation to date. The U.S. Attorney's Office for the District of Massachusetts announced the sentencing.

Under Zhou's plea agreement, MyTrade MM was required to stop selling Volume Support and permanently deactivate the bots behind it. The firm was also required to post a notice on its own website stating that volume support is "a form of wash trading and illegal under the laws of the United States." The remaining defendants from the October 2024 sweep face ongoing proceedings.