DOJ Wants Gotbit to Forfeit Crypto Worth $23m After Guilty Plea

The Justice Department (DOJ) announced on March 27 that it was seeking to recover roughly $23 million in crypto assets after crypto financial service firm Gotbit and its CEO and founder, Aleksei Andriunin, pleaded guilty to financial misconduct.

The legal action follows a criminal case in which a federal court in Boston accepted Gotbit’s acknowledgment of manipulating cryptocurrency trading activity. The company, operating as a market maker in the crypto asset industry, was accused of creating fake trading volumes to deceive investors about market demand and liquidity.

As part of its agreement with the DOJ, the firm agreed to relinquish the cryptocurrency linked to these operations. The DOJ stated that it had confiscated USD Coin (USDC) and Tether (USDT), which maintain their value by being pegged to the USD, from unhosted digital wallets controlled by the company.

According to prosecutors, the seized assets stem from conspiracy and wire fraud charges, as well as involvement in illicit financial activities. The case is currently under civil forfeiture proceedings and has yet to reach a final judgment.

The 26-year-old Andriunin, who is a citizen of both Portugal and Russia, was detained abroad in October last year and extradited to the United States in February.

According to authorities, Gotbit participated in a fraudulent conspiracy to manipulate crypto prices between 2018 and 2024 by using several accounts and sophisticated software. Cryptocurrencies such as Saitama and Robo Inu, which had dealings with Gotbit, are currently subject to separate investigations.

As part of the plea arrangement, the company agreed to cease all business activities and forfeit $23 million. The DOJ further stated that under the terms of the plea deal, Andriunin faces a potential sentence of up to twenty-four months in prison. Once released, he will be prohibited from engaging in any cryptocurrency-related ventures for at least three years while under supervision.

Gotbit’s lawsuit is part of a larger effort by U.S. authorities to regulate and secure cryptocurrency markets. The FBI launched NexFundAI, a digital token, last year as part of a clandestine campaign to combat fraudulent trading activities.

Gotbit was intimately implicated in the operation, collaborating with Saitama, a crypto firm based in Massachusetts, in what authorities say was a $7.5 billion market manipulation scheme. Prosecutors alleged that Saitama worked with Gotbit to inflate the token’s value while executives covertly liquidated their holdings, profiting significantly from the scam.

Other players in the crypto space, such as Canaan Inc. (NASDAQ: CAN) are likely to applaud the efforts being made by the authorities to hold to account bad players that could smear the reputation of the crypto and blockchain industry.

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