Wash trading reaches a courtroom — why a busy chart proves nothing

A British judge has cleared the way for the former chief executive of the Saitama token to be extradited to the United States, where he faces charges including wire fraud and market manipulation. Judge Samuel Goozee rejected Manpreet Kohli's challenge on Aug. 19 and sent the case to the UK government for a decision on the American request, according to Reuters. Kohli can still appeal, remains free on bail of 200,000 pounds, and has not been convicted of anything. The reason the case is worth a beginner's attention has little to do with the man and everything to do with what prosecutors say was purchased: trading activity itself.

Kohli had argued in part that US authorities could not adequately manage his mental health and risk of suicide in custody. The judge found that safeguards during his transfer and within the US prison system could reduce that risk to an acceptable level. Earlier this month a federal judge in Boston separately rejected his attempt to have the indictment dismissed, an attempt built on the argument that the Saitama token could not legally be classified as a security under US law.

The charges stem from Operation Token Mirrors, an investigation the Justice Department announced on Oct. 9, 2024, covering 18 individuals. Prosecutors allege that Saitama executives coordinated token purchases across multiple wallets and paid two firms, ZM Quant and Gotbit, to wash trade the token on several exchanges, and that executives publicly denied selling their holdings while privately offloading tokens for millions of dollars. They say Kohli made roughly $20 million. Saitama, an Ethereum-based token, once reached a reported market capitalization of $7.5 billion. These remain allegations against Kohli, who faces wire fraud, market manipulation, related conspiracy counts and operating an unlicensed money-transmitting business.

Wash trading is the concept at the center, and it is simple enough to explain in one sentence: the same asset is bought and sold repeatedly, through multiple accounts or with a colluding partner, to create trading volume that no real demand produced. One of the named firms did not contest the practice. Gotbit later admitted manipulating token prices and volumes for clients including Saitama, was ordered in June 2025 to forfeit $23 million, and its founder Aleksei Andriunin was sentenced to eight months in prison.

Volume and market capitalization are the two numbers a newcomer instinctively trusts, and both can be manufactured. Volume can be produced by trading with yourself. Market capitalization is just a thin price multiplied by a large supply, and neither number tells you whether anyone genuinely wants to own the token. Treat on-screen activity as a claim to be checked rather than evidence of demand, and be especially careful with the pattern prosecutors describe here, where the loudest public promises not to sell coincide with the quietest selling. This is information, not advice.