A newly unsealed indictment has charged five individuals with "conspiring to manipulate the market" in connection with an alleged scheme involving the ERC-20 Hydro (HYDRO) token.
a April 24 statement The US Department of Justice (DOJ) said the indictment charges three people with conspiring to manipulate Hydro's market. Two other individuals were charged separately for their roles in the scheme.
The Justice Department alleges that, from June 2018 through April 2019, Michael Ross Kane, former CEO of Hydrogen Technology Corp., Shane Hampton, Hydrogen's head of financial engineering, and George Wolvaardt defrauded market participants seeking to trade the Hydro tokens issued by Hydrogen.
Five Individuals Indicted in $2 Million Virtual Assets and Securities Manipulation Schemehttps://t.co/qLrHjkTKlY
โ Criminal Division (@DOJCrimDiv) April 24, 2023
According to the indictment, Wolvaardt, who was the CTO of a market-making company called Moonwalkers Trading Limited, designed a trading robot that executed a series of high-value "false orders" at dark intervals to make it appear as if there was high demand. of 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 manipulation of Hydro's price, the Justice Department asserts that the co-conspirators sold large portions of their holdings for a total of approximately $2 million in ill-gotten gains.
In addition, Tyler Ostern, former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer at Hydrogen Technology Corp., were also indicted for their part 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 counts, they each face a maximum sentence of five years in prison on the count of conspiracy to commit securities price manipulation and a staggering 20 years on each of the other counts. .
Ostern and Chorlian have each been charged with one count of conspiracy to commit securities price manipulation and wire fraud. If convicted, they will 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 lawsuit filed by the Securities and Exchange Commission (SEC), ordering them to pay $2.8 million in civil remedies and penalties.
Cointelegraph reached out to Michael Kane for comment but did not immediately receive a response.
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