Two senior executives at Hydrogen Technology, Michael Kane and Shane Hampton, have received sentences of over six years in prison for engaging in fraudulent activities related to the manipulation of cryptocurrency prices.
The U.S. Department of Justice (DOJ) declared on Tuesday that Kane, the CEO of Hydrogen Technology, and Hampton, the head of financial engineering, were found guilty of defrauding investors by participating in activities aimed at manipulating the price of the HYDRO token. Kane, aged 39, was given a three-year and nine-month prison term, while Hampton, aged 32, was handed a two-year and 11-month sentence.
The court determined that the two executives worked in collaboration with a South African company called Moonwalkers Trading to manipulate the price of HYDRO on a U.S.-based cryptocurrency exchange through the use of a trading bot. Their unlawful actions, which included wash trades and spoof trades, led to profits of $2 million from selling HYDRO at artificially inflated prices.
Nicole M. Argentieri, the head of the Justice Department’s Criminal Division, remarked, “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.”
It should be noted that Hydrogen Technology has faced legal repercussions in the past. The company was previously fined nearly $2.8 million by the U.S. District Court of the Southern District of New York for violating securities laws. Furthermore, Kane was ordered to pay $260,206 as part of a case brought by the Securities and Exchange Commission.
Additionally, two other individuals implicated in the scheme, Andrew Chorlian and Tyler Ostern, had previously admitted guilt to charges of securities price manipulation and wire fraud. They have subsequently been convicted and sentenced for their involvement in the fraudulent activities.
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In conclusion, the conviction of Hydrogen Technology executives for price manipulation underscores the growing emphasis on regulatory enforcement within the cryptocurrency industry. This case serves as a reminder of the potential consequences for individuals and companies involved in fraudulent activities in the digital asset space.