Hydrogen Technology Corporation Executives Sentenced for Crypto Securities Fraud

Executives of Hydrogen Technology Corporation have been sentenced for their involvement in a multimillion-dollar crypto securities fraud scheme. A federal judge in Florida has sentenced Michael Kane, CEO of the New York-based crypto firm, to nearly four years in prison for manipulating the price of HYDRO, a token issued by Hydrogen.

In a recent announcement, the Justice Department disclosed that Shane Hampton, the head of financial engineering at Hydrogen, received a sentence of two years and 11 months in prison, while Michael Kane was sentenced to three years and nine months. Nicole M. Argentieri, head of the Justice Department’s criminal division, stated that Hampton and Kane orchestrated a scheme using a trading bot to manipulate HYDRO’s price.

“In this case, for the first time, a jury in a federal criminal trial found that a cryptocurrency was a security and that manipulating cryptocurrency prices was securities fraud.”

Court documents reveal that Kane and Hampton hired Moonwalkers Trading Limited, a South African firm, to manipulate HYDRO’s price on a U.S.-based crypto exchange. The bot used by Moonwalkers Trading allegedly flooded the market with fake and fraudulent orders from October 2018 to April 2019.

Prosecutors claim that Kane, Hampton, and their co-conspirators executed approximately $7 million in wash trades and placed over $300 million in spoof trades for HYDRO through the bot. This manipulation enabled them to make around $2 million in profits from selling HYDRO over a span of about 10 months.

In September 2022, the U.S. Securities and Exchange Commission (SEC) charged Kane and Tyler Ostern, the chief executive of Moonwalkers Trading Limited, for their roles in effectuating the unregistered offers and sales of crypto asset securities.

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