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Canadian Crypto Executive Avoids Jail Time for Wash Trading Scheme

Guavy AI Editorial Team
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A Canadian man who pleaded guilty to charges of conspiracy and wire fraud in connection with his crypto firm's wash trading services has received a lenient sentence. Liu Zhou, also known as David Zhou or DZ, was charged in late 2024 for running MyTrade, which provided market making services including wash trading in the crypto sector.

Wash trading involves using 'bots' to artificially boost the volume or value of trading activity in a particular asset. The scheme was uncovered through an undercover sting operation by U.S. law enforcement that created a fake company called NexFundAI, which purchased wash trading services from MyTrade.

Zhou pleaded guilty in 2024 and was sentenced on Thursday to pay a fine of US$10,000 with no jail time. 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.

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