Outside Source
Hydrogen Technology Corporation executives have been sentenced for operating a multimillion-dollar crypto securities fraud scheme.
A federal Florida judge has sentenced Michael Kane, the chief executive of Hydrogen Technology Corporation, a New York-based crypto firm, to nearly four years in prison for manipulating the price of HYDRO, a token issued by Hydrogen.
In a Jun. 25 press release, the Justice Department said that Shane Hampton, who was the head of financial engineering at Hydrogen was sentenced to two years and 11 months in prison, while Michael Kane was sentenced yesterday to three years and nine months in prison.
Nicole M. Argentieri, head of the Justice Department’s criminal division, says Hampton and Kane orchestrated a fraud scheme by using a “trading bot to manipulate the price of their company’s cryptocurrency.”
“In this case, for the first time, a jury in a federal criminal trial found that a cryptocurrency was a security and that manipulating cryptocurrency prices was securities fraud.”
Nicole M. Argentieri
According to court documents, Kane and Hampton hired Moonwalkers Trading Limited, a South African firm, to manipulate HYDRO’s price on a U.S.-based crypto exchange. Although the name of the crypto exchange wasn’t specified in the press release, prosecutors say the bot used by Moonwalkers Trading “flooded the market with fake and fraudulent orders from October 2018 to April 2019.”
Prosecutors also claim Kane, Hampton, and their co-conspirators executed approximately $7 million in “wash trades” and placed over $300 million in “spoof trades” for HYDRO through the bot. This manipulation allowed them to make around $2 million in profits from selling HYDRO over about 10 months, the press release reads.
In September 2022, the U.S. Securities and Exchange Commission (SEC) charged Kane and Tyler Ostern, the chief executive of Moonwalkers Trading Limited, for their roles in “effectuating the unregistered offers and sales of crypto asset securities.”
This article first appeared at crypto.news
