Chinese National Behind MyTrade Sentenced After Crypto Bots Generated Millions in Fake Daily Trading Volume
A Chinese national who founded the cryptocurrency market-making firm MyTrade has been sentenced in Boston after admitting that his company used automated trading bots to manufacture artificial trading volume for dozens of cryptocurrencies. Liu Zhou, a Canadian citizen and Chinese national, was ordered to pay a $10,000 fine after previously pleading guilty to conspiracy to commit market manipulation and wire fraud. The case should matter to American investors because it exposes how supposedly sophisticated cryptocurrency service providers can manufacture the appearance of market demand while ordinary buyers are left trading against activity that was never genuine in the first place.
MyTrade presented itself as a cryptocurrency “market maker,” a term that normally suggests a financial intermediary providing liquidity and helping buyers and sellers transact efficiently. Behind that professional label, however, MyTrade offered clients a service called “Volume Support” that allowed cryptocurrency companies to specify how much artificial daily trading activity they wanted generated on selected exchanges. According to the Justice Department, MyTrade then used computer programs, or bots, to execute wash trades in which coordinated accounts repeatedly bought and sold the same assets without a legitimate commercial purpose.
This type of manipulation strikes at the information investors rely on when deciding whether a cryptocurrency has real market interest. Trading volume is one of the most visible signals on an exchange. A token showing millions of dollars in daily activity can appear liquid, popular and widely held, while a thinly traded token may warn investors that few genuine buyers exist. By manufacturing volume, a market manipulator can disguise weakness and create the illusion that thousands of independent market participants are actively trading an asset.
The Justice Department’s undercover operation revealed just how direct the alleged business model had become. Investigators created NexFundAI, a fictitious cryptocurrency company with an Ethereum-based token, and approached firms that offered cryptocurrency market-making services. In discussions with people Zhou believed were NexFundAI promoters, he explained that MyTrade could conduct self-trades by executing a purchase and sale within the same second and acknowledged that its volume bot could be used to conduct “pump and dumps.”
Even more revealing was Zhou’s description of who ultimately had to lose. According to the Justice Department, he explained that the objective was to attract outside community buyers—the people the operators did not know or care about—because those buyers had to lose money for the insiders to profit. That statement strips away the technical language surrounding crypto market making and exposes the economic logic underneath: manufacture activity, attract real money, and leave outsiders holding the losses.
For American investors, this is precisely why fake cryptocurrency volume is not a harmless technical violation. A retail buyer may open an exchange, see a token with substantial reported trading activity and assume the market itself has validated the asset. In reality, some of that apparent demand can be generated by coordinated software trading back and forth between controlled accounts, creating a marketplace that looks healthier than it actually is.
MyTrade’s operation was not limited to one experimental cryptocurrency. By October 2024, the Justice Department said the company was providing its Volume Support function to dozens of clients. As part of Zhou’s guilty plea, MyTrade was required to permanently disable wash-trading bots responsible for millions of dollars in daily artificial trading activity involving approximately 60 different cryptocurrencies.
That scale matters because cryptocurrency markets are highly sensitive to momentum. Investors often discover tokens through rankings, trending lists, trading-volume tables, social-media promotions and exchange recommendations. Artificial activity can therefore produce secondary effects far beyond the fake trades themselves: a token may attract attention because it appears active, qualify for greater visibility, or convince real investors that other buyers have already conducted meaningful price discovery.
Zhou himself explained another reason artificial volume is valuable. According to federal prosecutors, wash trading could help show continuous hourly activity and generate enough volume for cryptocurrency exchanges to waive listing fees. In other words, fake trades could potentially influence not only individual buyers but also the infrastructure through which a cryptocurrency gains wider market access.
This is where the threat extends beyond one dishonest trader. A manipulation service can act as infrastructure for many separate token issuers. Instead of every cryptocurrency project independently developing the tools needed to fabricate market activity, a specialized market maker can provide the deception as a commercial service, complete with automated bots, dashboards and customizable volume targets.
That model industrializes fraud. The client supplies the token, the market maker supplies the artificial liquidity, the bot generates activity around the clock, and unsuspecting investors see a market that appears more active than the underlying reality. Technology allows the scheme to operate at a speed and scale impossible for human traders manually placing orders.
The China-related dimension deserves particular American attention because Zhou was a Chinese national operating internationally in a financial sector that moves enormous amounts of money across borders with little regard for traditional geographic boundaries. Crypto infrastructure allows a market participant in one jurisdiction to manipulate activity visible to investors in another jurisdiction, using exchanges, wallets, tokens and automated programs distributed around the world. A manipulator does not need a physical office on Wall Street to distort the market seen on an American investor’s screen.
This creates a serious enforcement problem for the United States. Traditional securities markets are built around regulated exchanges, identifiable brokers, recordkeeping obligations and well-established surveillance systems. Cryptocurrency markets can involve decentralized exchanges, pseudonymous wallets, offshore companies, automated bots and service providers operating from multiple countries, giving transnational actors more opportunities to create artificial activity before investigators can reconstruct who actually controlled the trades.
The MyTrade investigation demonstrates an effective way to penetrate that environment. Rather than waiting for manipulated tokens to collapse and attempting to reconstruct losses afterward, federal investigators created their own cryptocurrency project and approached market makers as potential customers. That gave law enforcement a direct view into the services being offered and allowed investigators to hear how operators themselves described wash trading, artificial volume and pump-and-dump strategies.
The broader 2024 operation targeted several cryptocurrency market makers, including MyTrade, ZM Quant, CLS Global and Gotbit. Federal prosecutors described it as a first-of-its-kind investigation into widespread fraud and manipulation in cryptocurrency markets, demonstrating that the problem was not confined to a single operator. Later prosecutions produced guilty pleas and sentences involving other market makers accused of creating artificial trading volume for cryptocurrency clients.
For American investors, the lesson is that reported trading volume should never automatically be treated as proof of genuine demand. A token can show constant transactions without constant independent buyers. A rising volume chart can be generated by bots. Apparent liquidity can disappear when artificial trading stops, leaving real investors unable to sell without accepting severe losses.
Exchanges also have a responsibility to treat impossible or repetitive trading patterns as potential manipulation rather than legitimate liquidity. Accounts repeatedly buying and selling the same token within extremely short intervals, wallets trading primarily with connected wallets, mechanically repetitive transaction sizes and abrupt increases in volume without corresponding growth in independent users should all receive enhanced scrutiny. Automated manipulation requires automated detection.
Cryptocurrency companies themselves should face close examination when they hire outside firms specifically to inflate activity. Calling manipulation “market making,” “volume support,” “liquidity enhancement” or another technical phrase does not change its economic effect when the transactions exist primarily to mislead outsiders. A dashboard allowing a client to select how much fake daily volume it wants turns deception into something resembling an ordinary subscription service.
That normalization is particularly dangerous in crypto because many retail participants cannot independently determine whether trading activity is organic. Public blockchains can provide transparency about transactions, but transparency does not automatically reveal economic independence. Ten thousand visible trades do not mean ten thousand independent decisions if the wallets behind them are coordinated by the same operator.
The United States should therefore continue treating crypto manipulation as financial fraud rather than accepting the claim that digital assets operate according to fundamentally different standards. Investors should be entitled to the same basic principle whether they buy shares, commodities or digital tokens: trading activity presented as genuine market demand cannot be deliberately fabricated to lure outside money.
MyTrade’s own required disclaimer captures that principle. As part of Zhou’s plea agreement, the company had to state publicly that its Volume Support service constituted wash trading and was illegal under U.S. law. Its bots also had to be permanently deactivated.
The case should also push American investors to scrutinize foreign crypto intermediaries more aggressively. A polished website, professional dashboard or description such as “market maker” does not prove that a financial service is creating legitimate liquidity. When companies operate across China, Canada, offshore jurisdictions and decentralized exchanges, determining who controls the software and whose interests the trading system actually serves becomes essential.
China has become deeply involved in the global digital-asset ecosystem through developers, investors, mining infrastructure, trading communities and internationally operating entrepreneurs. When Chinese-national financial operators appear in U.S. fraud and market-manipulation prosecutions, Americans should pay attention to the cross-border architecture that allows money, algorithms and market influence to move quickly between jurisdictions. The risk is not limited to where the defendant lives; it lies in how easily foreign financial actors can reach American investors through borderless digital markets.
The most disturbing evidence from the MyTrade case is therefore not a complicated blockchain transaction. It is the simple business logic Zhou described to undercover investigators: find outside buyers and make them lose so insiders can profit. That should destroy any illusion that artificial crypto volume is merely a technical shortcut used to make markets look busy.
When bots manufacture millions of dollars in daily activity across dozens of cryptocurrencies, the victims are the real investors making decisions based on that false market. Their dollars are genuine even when the volume attracting them is not.
The United States should continue pursuing the market makers, software providers and international financial operators that sell manipulation as a service. Crypto markets cannot become a playground where foreign operators manufacture demand, lure American capital into manipulated assets and then dismiss the losses as the normal volatility of digital finance.
Liu Zhou’s sentencing closes another chapter of the MyTrade prosecution, but the warning remains much larger than one company. When a Chinese-national crypto entrepreneur can build automated infrastructure capable of generating millions of dollars in artificial trading activity every day for roughly 60 cryptocurrencies, Americans should understand how cheaply market reality can be fabricated—and how important it is to know whether the apparent crowd buying a digital asset consists of genuine investors or simply a bot trading with itself.
