The US Department of Justice (DOJ) has indicted five people for alleged market manipulation of the Ethereum-based cryptocurrency Hydro.
The indictment, just released by the DOJ, accused five people of conspiring to manipulate the market in relation to the ERC-20 Hydro token. In a statement made on 24 April, three people were charged with manipulating the market, while the other two were charged separately for their roles in the conspiracy.
They Can Get 5 to 20 Years in Prison
DOJ, June 2018 to April 2019 Hydrogen Technology Corp. Michael Ross Kane, the CEO of Hydrogen, claimed that Shane Hampton, Hydrogen’s head of financial engineering, and George Wolvaardt defrauded market participants who wanted to exchange Hyrdro tokens.
According to the indictment, Wolvaardt, chief technology officer of market maker firm Moonwalkers Trading Limited, designed a trading bot that executes a series of high-value fake orders at indefinite intervals to make it look like there is high demand for the token. The bot traded large amounts of tokens simultaneously through a single account.
The DOJ alleges that after Hydro’s price was artificially manipulated, its accomplices made an ill-gotten gain of approximately $2 million by selling most of their holdings.
Additionally, Tyler Ostern, the former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer from Hydrogen Technology Corp, were also accused of being involved in the alleged manipulation scheme.
Kane, Hampton, and Wolvaardt are each charged once with securities price manipulation, conspiracy to commit bank fraud, and bank fraud twice. If found guilty of all charges, they will face a maximum sentence of five years each on the securities price manipulation charge and 20 years in prison on each of the other charges.
On April 20, a New York District Court judge ruled against Michael Ross Kane in a lawsuit filed by the Securities and Exchange Commission and ordered him to pay $2.8 million in damages.
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