Former senior executives of the cryptocurrency project Hydrogen Technology Corp. have been sentenced in the United States to prison terms for manipulating the price of the Hydro token and defrauding investors.
According to the Department of Justice, former CEO Michael Kane and former head of financial engineering Shane Hampton hired the external firm Moonwalkers Trading Ltd. from South Africa to carry out their scheme.
From October 2018 to April 2019, the group conducted fictitious trades totaling approximately $7 million and placed fake orders through a bot exceeding $300 million.
As a result of these manipulations, Kane, Hampton, and their accomplices gained about $2 million in profits from selling Hydro over a 10-month period.
The criminal case against Hydrogen Technology Corp. was the first tried by a jury where cryptocurrency was deemed a security.
Michael Kane was sentenced to three years and nine months in prison, while Hampton received a sentence of two years and 11 months.
The SEC accused Hydrogen Technology Corp. of manipulating the cryptocurrency securities market in 2022.
In April 2023, a New York judge ordered Kane and the firm to pay $2.8 million in restitution and civil penalties.
Two other former executives of Hydrogen Technology Corp., Andrew Chorley and Tyler Ostern, pleaded guilty in May 2023. Both had been previously convicted.
In March 2024, in a default judgment on an insider trading case involving Coinbase, a U.S. court ruled that trading certain crypto assets on secondary markets constitutes securities transactions.