Five people have been accused of “conspiring to manipulate the market” in connection with an alleged scam involving the ERC-20 Hydro (HYDRO) token in a recent move by the American Department of Justice (DOJ) to take down fraudulent actors in the cryptocurrency market.
According to a statement released on April 24 by the US Department of Justice, three people were accused in the complaint of conspiring to manipulate the Hydro crypto market. Separate charges were brought against two more people for their participation in the scheme.
Five Individuals Charged in $2M Virtual Asset and Securities Manipulation Schemehttps://t.co/qLrHjkTKlY
— Criminal Division (@DOJCrimDiv) April 24, 2023
The DOJ asserts that from June 2018 to April 2019, Michael Ross Kane, the former CEO of Hydrogen Technology Corp., George Wolvaardt, and Shane Hampton, misled market participants who sought to trade the Hydrogen company-issued Hydro tokens.
For their alleged participation in the purported manipulation scheme, Tyler Ostern, the former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer from Hydrogen Technology Corp., were also accused.
In addition to two counts of wire fraud, Kane, Hampton, and Wolvaardt are each facing one count of conspiracy to manipulate the price of securities.
The Accused Gained $2 Million From the Alleged Scheme: DOJ
According to the DOJ, the accused allegedly conspired to manipulate the market for HYDRO and defraud market participants by creating the false appearance of supply and demand for HYDRO to induce other market participants to trade at prices, quantities, and times that they would not have traded otherwise.
Additionally, it is claimed that the defendants used a trading bot to place thousands of “spoof orders,” or orders that they had no intention of carrying out, as well as thousands of orders in which the bot bought and sold tokens to itself using the same account.
“The co-conspirators allegedly reaped $2 million in profit through their sales of Hydro at artificially inflated prices,” the Department of Justice affirmed.
If found guilty, each defendant could enjoy a maximum sentence of five years in prison for conspiring to manipulate the price of securities and twenty years for each additional charge.
Meanwhile, others face a maximum sentence of five years in prison if found guilty of one count of conspiracy to commit securities price manipulation and wire fraud.
This most recent action by the DOJ highlights the importance of protecting investors and maintaining the integrity of the evolving crypto markets.
