Paid crypto market making

Paid crypto market making is a token issuer hiring a self-described market maker whose actual service is to trade the token with itself or with confederates, manufacturing volume and price support instead of quoting genuine two-sided markets.

Also called volume support, volume generation, market manipulation as a service. Observed in crypto. One of the crypto-native manipulation techniques. 8 enforcement actions in the library.
Updated 2026-09-20

What is paid crypto market making, and where is the line?

A new token needs to look traded. Exchanges set listing requirements, aggregator sites publish trending lists, and a buyer scanning a chart reads a busy market as a sign that others want the token. Paid crypto market making is what happens when an issuer buys that appearance instead of waiting for it. The issuer pays a firm that calls itself a market maker, and the firm’s actual product is trading that has no economic purpose: it buys and sells the token with itself, from wallets it controls, or with accomplices, to produce volume and hold up the price.

The regulators’ own vocabulary is blunt. The SEC’s 2024 releases describe the service as “market-manipulation-as-a-service”, and the Department of Justice reports that one firm’s client dashboard called it “volume support”. Those phrases describe what was alleged. They are not a finding in any matter that has not been decided.

The boundary matters, because several neighbouring pages on this site sit close to it.

• It is not exchange wash trading. There the venue fakes its own volume to look liquid. Here the issuer is the customer and the venue is usually someone else’s, a public exchange or a decentralised one.
• It is not a market maker loan arrangement. That page covers a financial structure: tokens lent to a market maker with an option or a reward tied to price or listing outcomes. Paid crypto market making, as charged, is a fee for a behaviour. The two can overlap; the documents read for this page describe payment for volume.
• It is not wash trading in general. Wash trading is the mechanic: a trade with no change in beneficial ownership. Paid market making is the commercial arrangement that puts that mechanic on sale. The SEC’s Gotbit and ZM Quant complaints allege both, which is why those two records carry both tags in this library.
• It is not a rug pull. A rug pull removes the liquidity behind a token. This technique manufactures the look of it.
• It is not insider listing trading. That technique trades on knowledge of a listing decision; this one buys volume to help a token qualify for a listing.
• It is not genuine market making. Paying a firm to quote both sides and take inventory risk is ordinary business and lawful. The alleged conduct differs in purpose: trades that served no economic purpose.

How does it work, step by step?

1. The issuer creates or promotes a token. The SEC’s complaints describe tokens offered and sold to retail buyers, in the SEC’s words as securities.
2. A firm that calls itself a market maker is hired. In the criminal charging documents, the firms are alleged to have advertised the service, including a “trading bot” that could “create volume” in ZM Quant’s case, and a client dashboard on which the client set the amount of daily trades in MyTrade MM’s case.
3. The bot trades against itself. The SEC alleges the firms traded by “self-trading” on popular platforms or by other trading that served no economic purpose. The DOJ quotes a CLS Global employee describing an algorithm that “basically does self-trades, buying and selling” from multiple wallets.
4. The volume prints. The trades appear on public exchange data as activity. The SEC alleged that the bots at times produced more than $1 million of artificial volume a day in one token and billions of dollars a day in others.
5. The volume does a job. The DOJ’s account of what MyTrade MM’s founder allegedly told purported NexFundAI promoters gives three purposes: showing continuous trading activity, generating enough volume for exchanges to waive listing fees, and executing pump and dumps.
6. Genuine buyers take the other side. The same account has the founder describing the aim as finding outside buyers the firm neither knew nor cared about, on the footing that they would lose money for the arrangement to profit. That is an allegation about one firm’s sales pitch.

What law applies?

Where a token is a security, the SEC’s complaints in these matters rely on Sections 17(a)(1) and (3) of the Securities Act and Sections 9(a)(2) and 10(b) of the Exchange Act with Rule 10b-5(a) and (c). Section 9(a)(2) is the closest textual fit: it prohibits effecting, alone or with others, a series of transactions in a security creating actual or apparent active trading, for the purpose of inducing others to buy or sell. The Hydrogen matter, which predates the 2024 wave, adds Securities Act Section 5, the registration provision, and a Section 15(a) broker charge against the market-making firm’s CEO.

The Department of Justice charged wire fraud and conspiracy to commit market manipulation and wire fraud, and, for some defendants, an unlicensed money transmitting business conspiracy. Wire fraud does not depend on the token being a security.

What do the cases show?

Which real enforcement actions have alleged paid crypto market making?

This library holds 8 enforcement actions tagged paid crypto market making. The table shows the largest by civil penalty together with the most recently filed. Every row links to a page carrying the regulator's own release and, where one was published, the complaint.

All 8paid crypto market makingactions →

What the record shows. The library’s records fall into two generations. The first is the SEC’s 2022 action against The Hydrogen Technology Corporation, its former CEO and the CEO of the market-making firm it hired, which the SEC said yielded more than $2 million for Hydrogen. The second is the October 2024 wave, announced by the SEC and the DOJ on 9 October 2024: promoters (Saitama and Robo Inu among them) and the market makers they hired: Gotbit, ZM Quant and CLS Global.

Outcomes as documented by the DOJ and SEC: CLS Global pleaded guilty in January 2025 and was sentenced on 2 April 2025 to a $428,059 payment covering a fine and seized cryptocurrency and three years of probation barring it from US crypto markets; its consent judgment with the SEC (lr-26287) carried a $425,000 civil penalty. Gotbit and its founder pleaded guilty on 21 March 2025; Gotbit forfeited approximately $23 million in seized cryptocurrency, and the founder was sentenced to eight months in prison. In August 2026 the SEC filed a proposed settlement with Gotbit and dismissed its claims against Kedrov (lr-26598). The MyTrade founder was sentenced to a $10,000 fine on 6 August 2026.

What it does not show. Some records here are still marked as unresolved because the library holds only the announcement, not later docket activity. The DOJ release of October 2024 records that some individual defendants were charged and awaiting extradition; that is a status at that date only. And the library is a set of announced actions. It does not measure how much of the crypto market has bought this service.

How is it detected?

Detection works from the outside, by comparing reported volume with things that are harder to fake.

Wallet tracing. Buyer and seller wallets funded from one source, or trades that net to no change in ownership, are the on-chain signature of self-trading. The DOJ says one firm described using multiple accounts to avoid detection of wash trades on the public blockchain.

Cadence. Bots trade in patterns. ZM Quant staff were alleged to have described trading “ten times per minute or twenty times a minute”.

Sales material. In these matters, some of the evidence was the firm’s own marketing and calls: a dashboard, a proposal with a “Volume Support” section and sales calls. Where an operation offers itself to prospective clients, the offer is evidence.

Undercover approach. Discussed in the blog post on these cases: the FBI created a token and let the market makers offer to trade it.

• A token whose reported volume is large but whose order book, holder count and on-chain transfers between distinct owners do not grow with it.
• Trades that repeat at a fixed cadence or size, in bursts of many per minute, in a token with no news or promotion to explain them.
• Buyer and seller wallets that trace back to the same funding source, or to wallets funded by the market maker.
• A market maker's own sales material describing a "volume" or "trading bot" product, or a client dashboard where the client sets a daily volume target.
• Volume that stops the day a market-making contract ends, or that appears just before an exchange listing decision or a token sale.

What penalties does paid crypto market making actually attract?

The numbers below are computed from this site's own case records at build time, not quoted from a secondary source. They change whenever a new action is added to the library.

What are the red flags?

• A market maker paid a fee to deliver a volume level or a ranking, rather than to quote a spread and hold inventory at risk.
• A market maker that promises volume that "looks organic" or trading spread across many wallets so it is "not visible".
• Advice, during the sales call, on how to avoid detection on the public blockchain.
• An issuer that talks about volume as something bought for listing thresholds, not as something the market produced.

For a buyer: volume with no trace of new holders is a reason to look at the order book and the wallets before the chart. For an exchange, the DOJ’s account of listing-fee waivers shows why volume figures supplied by the project should not be treated as evidence of demand.

What paid crypto market making is not

It is not proof about any particular token. High volume is not evidence of this technique, and the signals above indicate a reason to investigate, not a finding.

It is not every market-making contract. Loan structures, incentive programmes and fees for genuine quoting are lawful. The line is trades with no economic purpose that create a false appearance of trading.

It is not settled how far it extends. The charging documents describe firms with many clients. They do not tell us how many other firms sell the same service.

Frequently asked questions about paid crypto market making

What techniques are related to paid crypto market making?

• Wash trading — Wash trading is buying and selling the same asset with no change in beneficial ownership and no market risk, so that a trade prints publicly and creates a false impression of activity or price.
• Exchange wash trading — Exchange wash trading is a trading venue reporting volume that did not genuinely occur, or permitting others to generate it, in order to appear more liquid and rank higher than it is.
• Market maker loan arrangements — A market maker loan arrangement lends token inventory to a market maker on terms tied to price or listing outcomes, creating an incentive to generate activity rather than to quote neutrally.
• Matched orders — Matched orders are prearranged trades between parties acting in concert, entered so that they execute against each other at a price agreed away from the market rather than discovered in it.
• Rug pulls — A rug pull is a crypto scheme in which the operators withdraw the liquidity backing a token, or mint unlimited new supply, leaving holders with an asset that cannot be sold at any price.
• Insider listing trading — Insider listing trading is buying a token ahead of an exchange's confidential decision to list it, exploiting the sharp price rise that a major listing announcement reliably produces.

Terms defined on this page

Market Maker · Wash Trade · Section 9a2 · Rule 10b 5 · Section 17a · Conduct Based Injunction · Digital Asset · Unregistered Offering · Market Manipulation As A Service · Volume Support

Sources

1. DOJ (D. Mass.) — Eighteen individuals and entities charged (Oct. 9, 2024) — U.S. Attorney's Office, District of Massachusetts
2. SEC — SEC Charges Three So-Called Market Makers and Nine Individuals (2024-166) — U.S. Securities and Exchange Commission
3. DOJ (D. Mass.) — Gotbit and founder sentenced (June 13, 2025) — U.S. Attorney's Office, District of Massachusetts
4. DOJ (D. Mass.) — CLS Global sentenced (Apr. 2, 2025) — U.S. Attorney's Office, District of Massachusetts
5. DOJ (D. Mass.) — MyTrade founder sentenced (Aug. 6, 2026) — U.S. Attorney's Office, District of Massachusetts
6. SEC Litigation Release 25737 — Hydrogen Technology Corp. judgments — U.S. Securities and Exchange Commission
7. Exchange Act § 9 — manipulation of security prices — Cornell Legal Information Institute

Reviewed September 20, 2026. Every statute link points at the primary text. If something here is wrong, tell us — corrections are logged in public.