The FBI’s undercover NexFundAI operation has returned to the spotlight after new posts revived details of how U.S. agents used a real ERC-20 token to catch firms accused of faking crypto market activity. Crypto commentators Evan Luthra and Carl Moon both described the case as an example of law enforcement building a token that looked like a standard project, then using it to document offers for artificial volume and manipulated trading patterns.
According to Luthra’s post on X, NexFundAI was built with a 100 billion token supply, a dedicated website, and branding designed to resemble a normal crypto launch. Undercover agents presented themselves as the project team and approached market makers for help creating trading activity. Carl Moon said the token had a real site and brand identity, and that suspected scammers quickly offered to generate fake volume for the agents.
Posts describe offers to inflate volume and shape charts
Luthra said Gotbit, MyTrade, CLS Global, and ZM Quant were among the firms caught in the operation. He claimed Gotbit said it could push NexFundAI’s daily volume to $1 million within six hours for about $200. He also said the firm tracked “fake volume” separately from “market volume” in its internal records.
In the case of MyTrade, Luthra said the firm explained the psychology behind chart manipulation during a recorded call. He quoted one participant as saying, “We make the chart look like a really nice roller coaster ride.” He also quoted the same person saying, “We have to make them lose money in order to make profit.” The statements came from his public post and were presented alongside claims about wash trading and pump-and-dump style behavior.
Real buyers entered a token with no product behind it
Luthra said one of the most striking parts of the case was that retail users still bought NexFundAI. The token had no real product, no genuine team, and no public utility outside the investigation, based on his account. Yet visible momentum and trading activity were enough to attract real buyers. A short point, but a sharp one. The appearance of demand did the work.
He also claimed the FBI later had to create a restitution portal after liquidity was removed and some users lost money. In another detail from the post, Luthra said a separate actor cloned the NexFundAI smart contract within 24 hours of the U.S. Department of Justice announcement and made $127,000 by repeating the same hype-driven pattern.
Earlier reporting linked the case to charges and penalties
Crypto.news had previously reported that NexFundAI was created under Operation Token Mirrors to expose wash trading and pump-and-dump schemes. That reporting said the operation led to charges against 18 individuals and entities, and named ZM Quant, CLS Global, MyTrade, and Gotbit in connection with alleged wash trading and market manipulation.
Related coverage also said CLS Global received a $428,000 fine over wash trading tied to NexFundAI, along with three years of probation. The firm was also barred from offering services in the United States during that period. In a later update, the FBI warned that scammers were using fake Tron tokens that appeared to copy law enforcement branding, while NexFundAI was cited again as an earlier example of an FBI-created token used to expose wash trading.
Luthra also said the FBI later ran another operation involving a token called Lexobit, which led to 10 more arrests. He added that IRS forensics found 1,209 of 1,221 trades in one firm’s activity could be traced back to wallets it controlled. The case is being discussed again because it showed, in unusually direct form, how a token can look active on the surface while much of the flow comes from coordinated wallets rather than genuine market demand.