The US has brought the first-ever charges against financial services firms for alleged market manipulation and wash trading in the cryptocurrency industry.A total of 18 people and entities have been chargedwith widespread fraud andmanipulation in the cryptocurrency markets, and the charges wereunsealed in Boston.Four defendants have pleaded guilty, another has agreed to plead guilty, and authorities have apprehended three other defendants in Texas, the United Kingdom, and Portugal this week.More than $25 million in crypto has been seized, with multiple trading bots deactivated.A United States Attorneys Office, District of Massachusetts, press release, says: According to the charging documents, the defendants who created cryptocurrency companies made false statements about their cryptocurrencies (tokens) and executed sham trades in those tokens (wash trades) to create the appearance of trading activity that would make the tokens look like good investments.These deceptive tactics allegedly attracted new investors and purchasers, which resulted in an increase in the tokens trading prices. The defendants are then alleged to have sold their tokens at the artificially inflated prices, a fraud commonly known as a pump and dump.Wash trading is a type of market manipulation where an entity sells and buys the same financial instruments to create a false impression of market activity.Crypto fraud charges described as new twist to old-school financial crimeThe cryptocurrency companies involved are also alleged to have hired financial services firms to wash trade their tokens in exchange for payment.Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, is quoted in the press release as saying: What the FBI uncovered in this case is essentially a new twist to old-school financial crime.Operation Token Mirrors targeted nefarious token developers, promoters, and market makers in the crypto space. What we uncovered has resulted in charges against the leadership of four cryptocurrency companies, and four crypto market makers and their employees who are accused of spearheading a sophisticated trading scheme that allegedly bilked honest investors out of millions of dollars.The FBI took the unprecedented step of creating its very own cryptocurrency token and company to identify, disrupt, and bring these alleged fraudsters to justice.Featured Image: AI-generated via IdeogramThe post U.S. charges 3 companies and 15 individuals for crypto fraud appeared first on ReadWrite.