CLS Global FZC LLC

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26287 / April 17, 2025

Securities and Exchange Commission v. CLS Global FZC LLC and Andrey Zhorzhes, No. 1:24-cv-12590-AK (D. Mass. filed Oct. 9, 2024)

SEC Obtains Final Judgment Against So-Called Market Maker Based in the United Arab Emirates

On April 7, 2025, the U.S. District Court for the District of Massachusetts entered final judgment against United Arab Emirates entity CLS Global FZC LLC, a self-proclaimed crypto asset market maker, in a case where the Securities and Exchange Commission alleged that CLS Global engaged in a scheme to manipulate the market for “NexFundAI,” a crypto asset the SEC previously alleged was being offered and sold as a security to retail investors. The alleged scheme was intended to induce investor victims to purchase NexFundAI by creating the false appearance of an active trading market for it.

CLS Global consented to the entry of the final judgment, which includes an order enjoining it from violating Sections 17(a)(1) and (3) of the Securities Act of 1933 and Sections 10(b) and 9(a)(2) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; an order to pay a civil penalty of $425,000, disgorgement of $3,000, and prejudgment interest of $80.39; and an order to comply with undertakings aimed at ensuring that CLS Global ceases doing business with United States persons or entities. The payment of the monetary relief may be offset by any amount ordered and paid to the United States in a parallel criminal action, United States v. CLS Global FZC LLC et al., No. 24-cr-10293 (D. Mass. 2024). The undertakings require CLS Global to: (a) within 30 days, take reasonable steps as necessary to ensure that CLS Global’s clients are not U.S. persons or entities; (b) within 30 days, implement policies and procedures reasonably designed to ensure that each new client is not a U.S. person or entity; and (c) within 45 days, and on an annual basis thereafter for a period of three years, certify compliance with the undertakings listed above, in writing.

The SEC’s litigation is being conducted by David D’Addio and Amy Harman Burkart.