A former executive of Hydrogen Technology Corp, Shane Hampton, has been convicted by a Florida federal jury for his involvement in a conspiracy to manipulate the price of the company’s native cryptocurrency token, Hydro. Hampton’s scheme allegedly lasted for several months and aimed to artificially inflate the value of Hydro’s token. The company had previously faced legal issues with the US securities regulator, resulting in a $2.8 million settlement in April 2023.
According to a press release, Hampton and his accomplices engaged in securities price manipulation and wire fraud conspiracy. Hampton is scheduled to be sentenced on April 29 and could face up to five years in prison for the securities price manipulation conviction and 20 years for the wire fraud conviction.
The manipulation scheme involved the use of a trading bot, which Hampton automated through a third-party firm. This bot was employed to manipulate the price of Hydro’s token on a US-based cryptocurrency exchange. The scheme involved executing fake orders, including “wash trades” and “spoof trades,” totaling $7 million and $300 million, respectively, over a period of seven months. These fraudulent trades aimed to attract retail investors to purchase the token, ultimately benefiting Hydrogen Technology Corp.
Hydrogen’s CEO, Michael Kane, had previously faced charges in September 2022 related to unregistered offers and sales of Hydro tokens, as well as manipulation of Hydro’s trading volume and price. Kane and another employee, Andrew Chorlian, who pleaded guilty to conspiracy to commit wire fraud and price manipulation, are awaiting sentencing.
The conviction was announced by legal authorities from the Justice Department’s Criminal Division and the FBI’s Criminal Investigative Division, based in the Southern District of Florida.