Five individuals have been accused of orchestrating a market manipulation scheme involving the Ethereum-based token, Hydro (HYDRO). This article delves into the details of the alleged plot, shedding light on the tactics employed, the key players involved, and the potential legal ramifications.
Unsealing the Indictment and Identifying the Accused
A recently unsealed indictment has exposed the alleged involvement of five individuals in a conspiracy to manipulate the market for the ERC-20 Hydro token. According to an April 24 statement from the United States Department of Justice (DOJ), three people were charged with conspiring to manipulate the Hydro market. Meanwhile, two others faced separate charges for their roles in the scheme.
The DOJ asserts that from June 2018 to April 2019, Michael Ross Kane, the former CEO of Hydrogen Technology Corp., Shane Hampton, Hydrogen’s financial engineering chief, and George Wolvaardt defrauded market participants who were looking to trade Hydro tokens issued by Hydrogen.
The indictment states that Wolvaardt, the chief technology officer for Moonwalkers Trading Limited’s market-making firm, developed a trading bot that carried out a series of high-value “spoof orders” at irregular intervals. These orders created the illusion of high demand for the token. Additionally, the bot engaged in wash trading by buying and selling large token volumes from the same account.
Profits from Artificial Hydro Price Manipulation
Following the alleged artificial manipulation of Hydro’s price, the DOJ contends that the co-conspirators offloaded substantial portions of their holdings, amassing roughly $2 million in illegitimate profits.
Moreover, Tyler Ostern, the former CEO of Moonwalkers, and Andrew Chorlian, a blockchain engineer from Hydrogen Technology Corp., were charged for participating in the alleged market manipulation plot.
Kane, Hampton, and Wolvaardt each face one count of conspiracy to commit securities price manipulation, one count of conspiracy to commit wire fraud, and two counts of wire fraud. If convicted on all charges, they could face up to five years in prison for the conspiracy to commit securities price manipulation charge and a staggering 20 years in prison for each other.
Ostern and Chorlian have each been charged with one count of conspiracy to commit securities price manipulation and wire fraud. They could face a maximum penalty of five years if found guilty.
It is worth noting that Hydro was temporarily integrated into the Publish0x platform as a reward. However, the token was swiftly removed from the platform.
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