A former executive of Hydrogen Technology Corp in Florida was found guilty by a federal jury for his involvement in a conspiracy to manipulate cryptocurrency prices.
Shane Hampton, the convicted individual, reportedly masterminded a scheme spanning several months aimed at manipulating the value of Hydrogen Tech’s native digital token, Hydro. The company had previously faced legal challenges from the US securities regulator, culminating in a $2.8 million settlement in April 2023.
According to a press release issued on Wednesday, Hampton and his accomplices were charged with securities price manipulation and conspiracy to commit wire fraud.
Hampton is set to be sentenced on April 29 and could face a maximum of five years in prison for the securities price manipulation conspiracy and up to 20 years for the wire fraud conspiracy.
Convicts Used ‘Bot’ to Manipulate Hydro Price
Hampton employed an automated trading bot developed by a third-party firm to manipulate the price of the token on a US-based cryptocurrency exchange. From October 2018 to April 2019, the Hydro token was inundated with fictitious orders, as detailed in the release.
During this period, the perpetrators utilized the bot to conduct $7 million worth of “wash trades” and $300 million in “spoof trades” involving Hydro. These deceitful transactions were designed to entice retail investors into purchasing the token, ultimately resulting in Hydrogen liquidating its own token holdings for $1.5 million within a seven-month timeframe.
Notably, the company’s CEO, Michael Kane, had previously faced charges in September 2022 for facilitating unregistered offers and sales of Hydro. Additionally, Kane was accused of manipulating the trading volume and price of Hydro, generating profits exceeding $2 million for Hydrogen.
At the time, the Securities and Exchange Commission (SEC) highlighted that Kane was responsible for the creation of the Hydro token and subsequently distributed it to the public through various means, such as airdrop and bounty programs.
Moreover, Andrew Chorlian, an engineer at Hydrogen Technology, admitted guilt to charges of conspiracy to commit wire fraud and price manipulation. Both Kane and Chorlian are currently awaiting sentencing.
The conviction was disclosed by legal officials from the Justice Department’s Criminal Division, the Southern District of Florida, and an officer from the FBI’s Criminal Investigative Division.