Crypto wash trader avoids jail

A Canadian man who pleaded guilty to criminal charges in the U.S. for his role in running a crypto firm that provided wash trading services to clients seeking to manipulate crypto trading has received a modest fine and no jail time in the case.

In late 2024, Liu Zhou (aka David Zhou, DZ) — a Canadian citizen and Chinese national — was charged in connection with a “wide-ranging conspiracy” to manipulate crypto markets.

According to U.S. authorities, his offshore firm, MyTrade, acted as a market maker in the crypto sector, which provided services including wash trading in crypto — using “bots” to engage in repeated artificial trades to boost the volume or value of trading activity in a particular crypto asset.  

The scheme was uncovered through an undercover sting operation carried out by U.S. law enforcement that involved the creation of a fake crypto company, NexFundAI, that purported to purchase wash trading services.

In 2024, Zhou pleaded guilty to wire fraud and conspiracy to commit market manipulation — charges that carry maximum penalties of five years in prison and fines of up to US$250,000 in the U.S.

On Thursday, in a federal court in Boston, he was sentenced to pay a fine of US$10,000.

As part of the plea deal, MyTrade permanently deactivated its bots and agreed to post a disclaimer on its website indicating that wash trading is illegal in the U.S.