DOJ Charges 5 for Alleged Crypto Price Manipulation Scheme

DOJ – The United States Department of Justice has charged five individuals in relation to an alleged scheme involving the ERC-20 Hydro (HYDRO) token.

iexclusivenews reports that according to an April 24 statement from the DOJ. Three people were charged with conspiring to manipulate the market for Hydro. While two others were charged for their roles in the scheme.

Details of the Alleged Scheme

The DOJ alleges that from June 2018 through April 2019, Michael Ross Kane, the former CEO of Hydrogen Technology Corp.

Shane Hampton, Hydrogen’s chief of financial engineering, and George Wolvaardt defrauded market participants looking to trade the Hydro tokens Hydrogen issued.

The indictment claims that Wolvaardt, who was the chief technology officer for a market-making firm called Moonwalkers Trading Limited. Designed a trading bot that executed a number of high-value “spoof orders” at obscure intervals to make it appear as though there was high demand for the token.

The bot also engaged in wash trading by buying and selling large volumes of the token from the same account.

Alleged Profits and Charges

DOJ claims that following the alleged artificial manipulation of the price of Hydro.

The co-conspirators sold large chunks of their holdings, netting an approximate total of $2 million in ill-gotten profits.

Tyler Ostern, the former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer from Hydrogen Technology Corp., were also charged for their involvement in the alleged manipulation scheme.

Kane, Hampton, and Wolvaardt have each been charged with one count of conspiracy to commit securities price manipulation. One count of conspiracy to commit wire fraud, and two counts of wire fraud.

If found guilty on all charges. They each face a maximum penalty of five years imprisonment.

In relation to the conspiracy to commit securities price manipulation charge and 20 years in prison on each of the other charges.

Ostern and Chorlian have each been charged with one count of conspiracy to commit securities price manipulation. And wire fraud. If found guilty, they face a maximum penalty of five years in prison.

Recent Court Ruling

On April 20, a New York District Court Judge ruled against Hydrogen Technology Corporation and its former CEO Michael Ross Kane. In a suit brought by the Securities and Exchange Commission (SEC). Ordering them to pay $2.8 million in remedies and civil penalties.