The FBI created a cryptocurrency as part of an investigation into price manipulation in crypto markets, the government revealed on Wednesday. From a report:

The FBI's Ethereum-based token, NexFundAI, was created with the help of "cooperating witnesses." As a result of the investigation, the Securities and Exchange Commission charged three "market makers" and nine people for allegedly engaging in schemes to boost the prices of certain crypto assets. The Department of Justice charged 18 people and entities for "widespread fraud and manipulation" in crypto markets.

The defendants allegedly made false claims about their tokens and executed so-called "wash trades" to create the impression of an active trading market, prosecutors claim. The three market makers -- ZMQuant, CLS Global, and MyTrade -- allegedly wash traded or conspired to wash trade on behalf of NexFundAI, an Ethereum-based token they didn't realize was created by the FBI.

"What the FBI uncovered in this case is essentially a new twist to old-school financial crime," Jodi Cohen, the special agent in charge of the FBI's Boston division, said in a statement. "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."

Abstract credit: https://slashdot.org/story/434115