Former Saitama CEO Manpreet Kohli has lost his UK court challenge against extradition to the United States, bringing him a step closer to a federal trial over alleged wire fraud and market manipulation tied to the Ethereum token that once carried a multibillion-dollar valuation.

Judge Samuel Goozee rejected the extradition challenge on August 19 and referred the case to British ministers, who must now decide whether to approve the U.S. request (Reuters). Kohli, 45, remains free on £200,000 bail and retains the right to appeal the ruling.

The former executive was arrested in London in October 2024 after U.S. prosecutors charged him alongside other Saitama figures as part of a wider investigation into alleged crypto pump-and-dump and wash-trading schemes.

Prosecutors Allege $20 Million in Personal Profit

At its peak, Saitama reached a market value of approximately $7.5 billion. Prosecutors allege that Kohli and other executives told investors they were holding and purchasing SAITAMA while secretly selling their own tokens into the market.

The federal charges against Kohli include wire fraud, market manipulation, and conspiracy to commit wire fraud, market manipulation, and the operation of an unlicensed money transmitting business. Prosecutors allege he personally generated roughly $20 million from Saitama token sales.

Saitama's leadership is also accused of coordinating small purchases across multiple wallets to create the appearance of broader demand, before paying market makers including ZM Quant and Gotbit to generate artificial trading volume. The token was traded on exchanges including BitMart, LBank, and XT.com.

Several defendants connected to Saitama have already pleaded guilty to offenses tied to the alleged scheme. Kohli has not been convicted and continues to contest the U.S. charges.

FBI Created Its Own Token to Target Wash Trading

The Saitama case formed part of Operation Token Mirrors, an unusual FBI investigation that created an Ethereum token called NexFundAI to expose market makers willing to manipulate trading volume.

The FBI-created token was offered to firms including ZM Quant, CLS Global, and MyTrade, with undercover investigators collecting evidence of alleged wash-trading services. U.S. authorities initially charged 18 individuals and entities and seized more than $25 million in cryptocurrency (DOJ).

The operation continued into 2026, when another 10 foreign nationals were charged over alleged manipulation involving Gotbit, Vortex, Antier, and Contrarian. CLS Global subsequently received a $428,000 penalty after admitting to wash trading NexFundAI during the undercover operation.

Extradition Decision Passes to UK Ministers

Separately, Kohli sought to have the U.S. indictment dismissed, arguing that SAITAMA could not legally qualify as a security under U.S. law. A federal judge in Boston rejected that challenge earlier in August, leaving the criminal case intact.

His UK challenge focused in part on whether U.S. custody arrangements could adequately manage his health and safety. Judge Goozee found the safeguards available during transport and imprisonment sufficient to allow the extradition process to continue.

The case now rests with British ministers for an extradition decision, underscoring how U.S. crypto enforcement cases can extend beyond domestic courts when defendants are overseas. Kohli remains on £200,000 bail and retains the right to appeal the August 19 ruling.