A newly unsealed indictment accuses five individuals of “conspiring to manipulate the market” over an alleged scheme involving the ERC-20 Hydro (HYDRO) token.
The indictment charges the three with conspiring to manipulate the Hydro market, according to an April 24 statement from the US Department of Justice. Two others have been charged separately for their alleged involvement in the scheme. From June 2018 to April 2019, former Hydrogen Technology Corp. CEO Michael Ross Kane; Hydrogen Director of Financial Engineering Shane Hampton; George Wolvaardt defrauded market participants who wished to trade Hydro tokens issued by thaHydrogen, the DOJ alleges.
According to the IndicTMENT, WOLVAARDT, The Chief Technology Office of a Market-Marking Firm Called Moonwalkers Trading Limited, Designed A Trading Bot THAT E. XECUTED NUMEROUS HIGH-VALUE "FALSE Orders" at VAGUE Intervals to Make It Appear Seems Like there is a high demand for the token. The bot also bought and sold large amounts of tokens from the same account a practice known as wash trading.
After allegedly manipulating the price of Hydro, the DOJ alleges that the co-conspirators sold off their substantial holdings, netting approximately $2 million in ill-gotten gains.
Additionally, Tyler Ostern, the former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer at Hydrogen Technology Corp., have also been charged for their involvement in the alleged manipulation scheme. Kane, Hampton and Walvat were each charged with one count of conspiracy To manipulate securities prices, one count of conspiracy to commit wire fraud and two counts of wire fraud.
If convicted on all counts, they each face up to five years in prison for conspiracy to manipulate securities prices and 20 years for each of the other counts. Ostern and Chorlian were each charged with one count of conspiracy to manipulate securities prices and one count of wire fraud. If found guilty, they face up to five years in prison.
On April 20, a New York district court judge ruled against Hydrogen Technology Corporation and former Hydrogen CEO Michael Ross Kane in a lawsuit brought by the SEC, ordering them to pay $2.8 million in residential measures and civil penalties.
