TRM Labs

On October 18, 2024, the U.S. Attorney’s Office for the District of Massachusetts announced charges against 18 individuals and entities for their involvement in crypto-related fraud and market manipulation. Over $25 million in cryptocurrency was seized, and several trading bots that facilitated wash trades were shut down. The defendants, including executives from cryptocurrency companies, market-making firms, and their employees, face allegations of fraudulent practices that manipulated trading volumes and token prices, misleading investors and generating illicit profits. In an unprecedented move, the FBI created a covert cryptocurrency service called NextFundAI as part of Operation Token Mirrors. This operation allowed federal agents to infiltrate the network of market makers involved in wash trading schemes. Posing as potential clients, the FBI gained real-time insights into market manipulation, recording how key individuals at market-making firms operated and offered their services. Specifically, the FBI developed a token infrastructure for NextFundAI, publicly marketed as a "security token," to attract potential fraudsters. By integrating NextFundAI into the cryptocurrency ecosystem, agents monitored and documented wash trading and pump-and-dump schemes firsthand. The FBI limited NexFundAI token supply to make it appear highly desirable, allowing them to track token transfers and identify fraudulent activity patterns and wash trading with NexFundAI inflated perceived market activity, which agents tracked and documented. After inflating NextFundAI activity, some traders promoted it as a "hot" investment, then sold off large amounts to crash the price, while the FBI collected crucial data and uncovered the mechanics of widespread crypto fraud and dismantle key criminal networks. The operation led to arrests, including Gotbit CEO Aleksei Andriunin, who was apprehended in Portugal, and Saitama CEO Manpreet Kohli, arrested in the UK and awaiting extradition to the U.S. Gotbit had been providing wash trading services since 2018, profiting millions from clients. Saitama had a peak market valuation of over $7.5 billion, and prosecutors allege the company’s executives used deceptive practices to profit from manipulated token trades. According to TRM Labs, on October 9, 2024, the same day the DOJ press release was published, an unknown individual created a fake token called “NexFund,” imitating the undercover FBI token, NexFundAI. This imposter token used 1.4 ETH ($2,300) to create 420,690,000,000 “NexFund” tokens. In 24 hours, the imposter pumped the tokens, then swapped them for over 52 ETH ($127,000), cashing out at an international exchange on October 10.

TRM Labs made LinkedIn’s inaugural list of ✨Top Startups in Washington, D.C.✨! We’re honored to be recognized for our employee growth and engagement, jobseeker interest (we’re hiring!), and caliber of our team’s talent. See the full list of honorees here (and be sure to check out our open roles on our site) 👉 https://hubs.la/Q02TS6Nc0

The weather might be cooling down, but the news across the cryptoverse is heating up! 🔥 In this edition of The Weekly Roundup, our team of experts — Ari Redbord, Angela Ang, and Isabella Chase — shed light on these latest and developing stories: 🇹🇼 Taiwan pilots crypto custody services by local banks, clamps down on unlicensed crypto business 👮♂️ FBI Cleveland works with Tether to seize funds 👩⚖️ Government recommends sentences in Bitfinex case ahead of November sentencing 🗳️ Trump and Harris lean into crypto on campaign homestretch 🚫 Big fines teach important lessons 🇪🇺 🇬🇧 The EU and UK step up statements on malign state threats 👇 Let’s get into it.

💻 Ransomware attacks have surged dramatically in 2024 — both in frequency and sophistication — with cybercriminals increasingly targeting high-value sectors such as critical infrastructure, healthcare, telecommunications, and financial services. The attacks themselves are more complex than ever, too — thanks to the proliferation of new ransomware strains, advanced attack techniques, and the rapid expansion of Ransomware-as-a-Service (RaaS). In our latest blog post, we explore the role of cryptocurrency in #ransomware operations, including trends in attacks from Russian-speaking ransomware groups, emerging laundering techniques and technological threats, and how law enforcement teams and governments are fighting back. Check it out here 👉 https://hubs.la/Q02Tz8rn0

🇩🇪 Last week in Frankfurt, the TRM team worked with the Royal United Services Institute (Europe) and the Future of Financial Intelligence Sharing (#FFIS) to deliver a session on the foundations of anti-money laundering (AML) partnerships in Germany. Isabella Chase and Michael Scherrer shared their insights on what impact the new EU AML Regulation Article 75 (#AMLR75) will have on the private sector, and discussed the importance of public-private partnerships in detecting and disrupting #crypto crime. Thanks to all who joined and shared their valuable insights on this topic!

🇸🇬 Earlier this month in Singapore, TRM Labs joined our partners from Elevandi, Amazon, and Crypto.com for a case competition as part of the Blockchain Guardians Programme. The Blockchain Guardians Programme (a partnership between Elevandi, TRM Labs, Crypto.com, and Amazon) provides 31 university and polytechnic students in Singapore with an intensive 10-week immersion into the world of #crypto compliance — including two study visits, mentorship by industry veterans, and a specially curated TRM Labs certification course. At the case competition — hosted by Amazon — TRM’s APAC Account Director Adriel W. had the pleasure of judging students’ presentations on #blockchain use cases in e-commerce, alongside Kennie Ong (Amazon’s Payment Innovation Lead), Lucas Loh (Amazon’s Infrastructure and Regulated Industries Policy Lead), Chek-Tchung Foo (Elevandi’s Executive Director of Public Policy), and Fiona C. (Crypto.com’s Compliance Director). Thank you Amira Karim and Kennie Ong for your hospitality, and Yong Liang Mun and the rest of the Elevandi team for setting this up. We’re looking forward to the graduation ceremony at the Singapore FinTech Festival next month!

🏦 In our latest #TRMTalks, host Ari Redbord sits down with Anchorage Digital’s Global Head of Operations, Rachel Anderika, to discuss what it means to be the first federally chartered #crypto bank; what the company has built since the OCC charter; and how to build with compliance, safety, and security as critical infrastructure. Listen to the full episode here ➡️ https://hubs.la/Q02TvCLK0

🇬🇧 The TRM team attended Chief Disruptor’s RAF Counter-Intelligence and Security Conference in London last week — where Sujit Raman shared key insights on how #blockchainintelligence can uncover and disrupt threats in the #crypto economy. Big thank you to Richard Morgan for organizing this event, and to all of the other speakers who shared their unique insights!

Payment service providers (PSPs) act as the bridge between the #crypto and fiat ecosystems, enabling value transfers at the speed of the internet. 🏎️💨 However, their unique position at this intersection also exposes them to significant risks. Join Angela Ang (Senior Policy Advisor, APAC at TRM Labs), Aaron Chua (Regional Head of Compliance at StraitsX) and Rodrigo Peiteado (Financial Crime Intelligence Lead at BVNK) for an in-depth discussion on managing risk at scale in the world of crypto payments, October 29 or 30. They’ll be covering: ✅ The diversity and complexity of risks faced by PSPs ✅ Strategies for balancing risk with opportunity ✅ How #blockchainintelligence can be used to detect financial crime and increase efficiency Save your spot now ➡ https://hubs.la/Q02S_3DF0

We are hiring! Join our mission and build a safer financial system at TRM!