Taiwanese man Antoine Tsao, also known as Chung Tien Tsao, was arrested on March 31 at John F. Kennedy International Airport in New York for his alleged involvement in a transnational cryptocurrency market manipulation and fraud scheme. According to court documents, a grand jury in Northern California issued an indictment against him on March 25, charging him with conspiracy to commit wire fraud and wire fraud.
Tsao was the business development manager at the Belize-registered cryptocurrency company GOTBIT CONSULTING LLC, also known as “Gotbit Hedge Fund.”
Established in 2017, the company operated domestically and internationally, claiming to provide “market making” services, including monitoring trades and price fluctuations, utilizing fluctuations for trading, and offering related advisory services. One of Gotbit’s core businesses involved manipulating the market through fictitious trades (Wash Trading) to provide false trading activity and price trends to attract external investors and drive up coin prices.
From 2018 to August 2024, Tsao and several other defendants, including sales manager Ian Sofronov from Russia, global client manager Nemanja Popov from Serbia, and a co-founder and CEO based in Russia and Portugal (co-conspirator 1), were alleged to have conspired to manipulate prices and trading volumes of various cryptocurrencies for significant profit.
One of the manipulated cryptocurrencies was “Lexobit,” which was created under law enforcement guidance for investigative purposes.
In February 2024, undercover agents posing as cryptocurrency entrepreneurs approached Gotbit to investigate its market manipulation tactics. During a cryptocurrency conference, Tsao met with the undercover agents and revealed, “I believe the main difference between cryptocurrency and other industries lies in the relatively light regulation of cryptocurrency. We do things that are impossible in traditional markets…”
He further explained Gotbit’s familiarity with inflating prices and dumping processes of cryptocurrency projects: “We’ve done a lot of liquidations for projects. The prices of some ‘meme projects’ are pumped up and then they start dumping… We just dump everything and move on to the next. We charge about 2% on the liquidations. So, we are also very transparent in this respect. We don’t make judgments.”
Subsequently, Tsao created a Telegram group named “Lexobit GotBit” and arranged for his colleague Sofronov and others to participate in business negotiations with the undercover agents. During a video conference in May 2024, they discussed control methods such as “high-frequency trading,” “trade volume management,” and “round-the-clock monitoring.”
Gotbit’s partnership proposal clearly stated that it had a six-person trading team capable of controlling overall market trends and trading performance. Tsao told the undercover agents, “You know what you want to see in the charts… You tell us what to do, and we execute.”
According to law enforcement investigations, Gotbit charged customers around $5,000 per month to conduct false trading activities on their tokens, making the tokens appear active on the market to attract general investors to purchase and inflate coin prices. Subsequently, customers and Gotbit profited from selling the tokens at high prices, resulting in significant losses for investors.
In a media interview in 2019, a Gotbit founder admitted, “Our product now is to provide comprehensive control over the token market: trading volume, prices, liquidity, and profit from price fluctuations… We create buy orders from one account and sell orders from another account, and they execute within a price spread where there are no other orders…”
When asked if cryptocurrency exchanges could track Gotbit’s accounts engaging in “self-trading,” the founder responded, “We have a solution for this. The current version of our software supports up to 20 accounts for cross-platform trading. Suppose all 20 accounts at an exchange are connected to our bot. We need to do some magic with IP addresses, but… It looks like these 20 accounts are trading with each other, making it difficult to trace what actually happened.”
He bluntly stated, “I believe the ones suffering losses here are investors and those who believe in the cryptocurrency industry.”
According to the Department of Justice, Gotbit founder Aleksei Andriunin reached a plea agreement with a federal prosecutor in Boston on March 21, agreeing to forfeit cryptocurrency assets valued at $23 million. The indictment also charged Gotbit’s two directors, Fedor Kedrov and Qawi Jalili.
Currently, Antoine Tsao has been transferred for trial in Northern California.