5 charged by DOJ for alleged crypto price manipulation scheme
A newly unsealed indictment has charged five people with “conspiring to manipulate the market” in relation to an alleged scheme involving the ERC-20 Hydro (HYDRO) token.
A statement from the US Department of Justice (DOJ) on April 24 said the indictment charged three people with conspiring to manipulate the market for Hydro. Two other people were charged separately for their roles in the scheme.
The DOJ alleges that from June 2018 to April 2019, Michael Ross Kane, former CEO of Hydrogen Technology Corp., Shane Hampton, Hydrogen’s chief financial engineer, and George Wolvaardt defrauded market participants who wanted to trade the Hydro tokens that Hydrogen issued.
According to the indictment, Wolvaardt, who was the chief technology officer of a market-making firm called Moonwalkers Trading Limited, designed a trading robot that executed a series of high-value “spoof orders” at vague intervals to make it appear as if there was high demand for the token. The bot also bought and sold large volumes of the token from the same account – a practice known as wash trading.
Following the alleged artificial manipulation of the price of Hydro, the DOJ alleges that the co-conspirators sold large portions of their holdings for a total of approximately $2 million in undesired profits.
In addition, Tyler Ostern, the former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer from Hydrogen Technology Corp. also charged for their involvement in the alleged manipulation scheme.
Kane, Hampton and Wolvaardt have each been charged with one count of conspiracy to commit securities price manipulation, one count of conspiracy to commit wire fraud and two counts of wire fraud.
If convicted on all charges, they each face a maximum sentence of five years in prison on the charge of conspiracy to commit value manipulation and a staggering 20 years in prison on each of the other charges.
Ostern and Chorlian have each been charged with one count of conspiracy to commit securities price manipulation and wire fraud. If found guilty, they face a maximum sentence of five years in prison.
On April 20, a New York District Court judge ruled against Hydrogen Technology Corporation and its former CEO Michael Ross Kane in a case brought by the Securities and Exchange Commission (SEC), ordering them to pay $2.8 million in legal remedies and civil penalties.
Cointelegraph reached out to Michael Kane for comment, but did not immediately receive a response.
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