MIAMI – The co-founder of a Miami-based cryptocurrency company was among five men charged in a $2 million “manipulation scheme,” federal prosecutors said Monday.
Michael Kane, 38, was the co-founder and CEO of Hydrogen Technology.
He, along with Shane Hampton, 31, of Philadelphia, and George Wolvaardt, 38, of Johannesburg, South Africa, are charged with attempting to manipulate the market for HYDRO, a token on the Ethereum blockchain platform.
The trio defrauded market participants "by creating the false appearance of supply and demand for HYDRO to induce (others) to trade at prices, quantities and times that they otherwise would not have traded," according to a Department news release. of Justice of the USA
Prosecutors said that Kane, Hampton and Wolvaardt "used a trading bot to place thousands of orders they did not intend to execute, or 'falsified orders,' and thousands of orders in which the bot bought and sold tokens to itself at through the same account, or 'wash changes'”.
Wolvaardt was the CTO of Moonwalkers Trading Limited, "a self-described 'market making' firm that allegedly designed the trading bot and was hired by Kane and Hampton to manipulate the HYDRO market," prosecutors said.
The three were able to earn $2 million through HYDRO sales at "artificially inflated prices," prosecutors alleged.
Also defendants in the scheme were Tyler Ostern, 29, of Coos Bay, Oregon, a former CEO of Moonwalkers, and Andrew Chorlian, 29, of New York, a blockchain engineer at Hydrogen Technology.
Prosecutors charged Kane, Hampton and Wolvaardt with one count of conspiracy to commit securities price manipulation, one count of conspiracy to commit wire fraud and two counts of wire fraud. All three could spend decades in prison, authorities said.
Ostern and Chorlian faced charges of conspiracy to commit securities price manipulation and wire fraud. Prosecutors said the two could spend up to five years behind bars.
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