The ERC-20 Hydro token is allegedly the subject of a conspiracy, and the US Department of Justice has charged five people with market manipulation.
- Five people have been accused of participating in the alleged market manipulation of the Ethereum-based “Hydro” coin.
- Two people were accused separately for their alleged involvement in the scheme, and three more people were charged in the indictment for conspiring to manipulate the market for Hydro.
Charges Imposed by DOJ
To manipulate the price of the “Hydro” Ethereum-based coin, the US Department of Justice has filed charges against five individuals. Three people are accused of conspiring to manipulate the market for Hydrogen in the indictment: George Wolvaardt, Shane Hampton, and Michael Ross Kane, the former CEO of Hydrogen Technology Corp. and head of financial engineering at Hydrogen. Two additional people, Andrew Chorlian, a blockchain engineer from Hydrogen Technology Corp., and Tyler Ostern, the former CEO of Moonwalkers, were also separately accused of their alleged involvement in the scheme.
The Scheme
According to the DOJ, Kane, Hampton, and Wolvaardt deceived market participants looking to sell the Hydro tokens that Hydrogen released between June 2018 and April 2019. The indictment claims that Wolvaardt, the chief technical officer for Moonwalkers Trading Limited, a market-making company, created a trading bot that executed a series of high-value “spoof orders” at random intervals to simulate massive demand for the token.
The bot engaged in “wash trading,” which uses the same account to buy and sell several instances of a given coin simultaneously. The DOJ asserts that after the alleged artificial rigging of the Hydro price, the co-conspirators sold off sizable portions of their interests and earned an estimated $2 million in illegal gains.
Charges and Penalties
Kane, Hampton, and Wolvaardt are accused of conspiring to commit wire fraud, securities price manipulation, and two counts of wire fraud. They each face a horrifying maximum penalty of 20 years in jail if found guilty on all counts, in addition to a potential sentence of five years in prison for conspiring to manipulate the price of securities. Ostern and Chorlian are accused of conspiring to commit securities price manipulation and wire fraud on one count. They might get a maximum sentence of five years in prison if proven guilty.
Legal Proceedings
In a case brought by the Securities and Exchange Commission, a New York District Court judge ruled on April 20 against Hydrogen Technology Corporation and former Hydrogen CEO Michael Ross Kane, ordering them to pay $2.8 million in remedies and civil penalties.
The Impact
Market manipulation methods undermine investor confidence and damage the fairness of the financial markets. Additionally, they might result in monetary losses for uninformed investors who think they are making wise judgments based on legitimate market demand. The five people involved in the Hydro market manipulation scam have been charged, demonstrating the US government’s determination to bring those responsible to justice.
Conclusion
The indictment of five people in the Hydro market manipulation conspiracy serves as a reminder of the dangers of cryptocurrency investing and the value of regulatory control in defending investors. The US government’s determination to hold wrongdoers accountable and safeguard the integrity of the financial markets is demonstrated by the DOJ’s investigation into the scam and legal action taken against those involved. Investors should use caution and diligence when investing in cryptocurrencies and look for trustworthy information from reputable sources.
