An unsealed indictment charges five people with “conspiracy to manipulate the market” in connection with an alleged scheme involving the ERC-20 Hydro token (HYDRO).
An April 24 announcement from the United States Department of Justice said the indictment charged three people with conspiring to manipulate Hydro’s market. Two other people were charged separately for their alleged involvement in the scheme.
The DOJ alleged that from June 2018 to April 2019, Michael Ross Kane, former CEO of Hydrogen Technology Corp.; Shane Hampton, Head of Financial Engineering at Hydrogen; and George Wolvaardt defrauded market participants seeking to trade the Hydrogen brand issued by thaHydrogen.
According to the indictment, Wolvaardt, who was the chief technology officer of a trading company called Moonwalkers Trading Limited, designed a trading bot that fulfilled several high-value “orders” over time not far to give an opinion on the place is the high demand for tokens. The bot also bought and sold large volumes of tokens from the same account – a practice known as wash trading. As a result of Hydro’s alleged fraud, the DOJ says the conspirators sold most of their holdings, resulting in a total of nearly $2 million in ill-gotten gains.
In addition, Tyler Ostern, former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer from Hydrogen Technology Corp. they were also charged with involvement in the alleged fraud scheme.
Kane, Hampton and Wolvaardt were each charged with conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud and two counts of wire fraud. If convicted on all charges, each of them faces a maximum sentence of five years in prison for conspiracy to falsify securities prices and a maximum of five years in prison for each of the others.
Ostern and Chorlian were each charged with one count of conspiracy to manipulate securities prices and wire fraud. If convicted, they face a maximum of five years in prison.
On April 20, a New York district judge ruled against Hydrogen Technology Corporation and former Hydrogen CEO Michael Ross Kane, in a lawsuit filed by the Securities and Exchange Commission, ordering them to pay $2.8 million in damages and penalties.
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