Crypto again meets prison… this is getting to be a normal part of crypto investing.
In a significant legal development, two senior figures from the fintech company Hydrogen Technology have been sentenced to prison for engaging in fraudulent activities related to their cryptocurrency, HYDRO. Michael Kane, co-founder and CEO, based in Miami Beach, Florida, along with Shane Hampton, the Head of Financial Engineering from Philadelphia, Pennsylvania, were found guilty of perpetrating a sophisticated securities fraud and wire fraud.
CRYPTO BREAKING NEWS
Ex-fintech CEO sentenced to 3.75 years over price manipulation scheme. A federal judge sentenced Michael Kane and Shane Hampton to prison for their roles in manipulating cryptocurrency prices at Hydrogen Technology Corporation. check us out @… pic.twitter.com/bCYDzVSwri— InnovatekMobile (@Neome_com) June 25, 2024
According to the U.S. Department of Justice, the fraud involved the artificial inflation of HYDRO’s price on a prominent U.S. cryptocurrency exchange. This was achieved by employing a South African company, Moonwalkers Trading Limited, which utilized advanced software and trading bots to manipulate market activities. From October 2018 to April 2019, these bots executed fake orders that significantly distorted the trading volume and price of HYDRO.
The fraudulent scheme included about $7 million in wash trades—where the conspirators traded with themselves to create misleading market activity—and $300 million in spoof trades, which involved placing and quickly canceling orders to manipulate prices. Ultimately, the group realized profits of around $2 million from offloading HYDRO at inflated prices.
🚨BREAKING: Shane Hampton and Michael Kane got sentenced for manipulating $HYDRO prices. They pulled off $7M in wash trades and $300M in spoof trades, fooling investors. This case is huge since a jury ruled #crypto as a security for the first time. Justice served!… pic.twitter.com/F6WhSzi2uG
— The Crypto Times (@CryptoTimes_io) June 26, 2024
This case marks a landmark moment as it represents the first U.S. criminal jury trial to classify a cryptocurrency as a security under federal law, which has substantial implications for the crypto industry. The jury determined that HYDRO was indeed a security because its sales involved investment contracts.
🚨Two former executives of Hydrogen Technology were sentenced for manipulating #Crypto price and defrauding investors❗️
⚖️ Michael Kane gets almost 4 years and Shane Hampton 3 years imprisonment by the @TheJusticeDept
⚠️Manipulated $HYDRO prices with $7M in wash trades and… pic.twitter.com/rEhApHbRAO
— TheNewsCrypto (@The_NewsCrypto) June 26, 2024
Reflecting the severity of their crimes, Michael Kane received a prison sentence of three years and nine months, whereas Shane Hampton will serve two years and 11 months.
Major Points
- Michael Kane and Shane Hampton, executives at Hydrogen Technology, have been sentenced to prison for cryptocurrency securities fraud and wire fraud.
- They used a South African firm’s trading bots to inflate the price of their cryptocurrency, HYDRO, on a U.S. exchange.
- The scheme included $7 million in wash trades and $300 million in spoof trades, resulting in $2 million in profits.
- This case is the first U.S. criminal jury trial to classify a cryptocurrency as a security under federal law.
- Kane received a sentence of three years and nine months, while Hampton was sentenced to two years and eleven months.
RM Tomi – Reprinted with permission of Whatfinger News
