Former Hydrogen Technology Execs Sentenced for Crypto Price Manipulation Scheme
Summary:
Michael Kane, the former CEO of Hydrogen Technology Corporation, has been sentenced to approximately four years in prison by a Florida judge for his role in a crypto price manipulation scheme. Similarly, Hydrogen Technology's ex-Head of Financial Engineering, Shane Hampton, has been issued a 35-month prison term. This decision comes as part of an increased push by U.S officials, particularly the SEC, to regulate cryptocurrencies identified as securities. Pending cases against numerous crypto companies continue, but the SEC has reportedly dropped attempts to label Ether (ETH) as a security.
A federal judge in Florida has imposed a sentence of approximately four years imprisonment on Michael Kane, the ex-CEO of Hydrogen Technology Corporation, following his admission of guilt. The U.S Department of Justice announced on June 24 that Kane received a 45-month jail term due to his involvement in securities fraud stemming from a cryptocurrency price manipulation plot. Similarly, the former Head of Financial Engineering at Hydrogen Technology Corporation, Shane Hampton, was issued a 35-month prison sentence for his participation in akin offenses.
"This trial, in which a federal criminal jury has for the first time determined a cryptocurrency to be a security subject to fraud, underscores that price manipulation of cryptocurrencies constitutes securities fraud," expressed Principal Deputy Assistant Attorney General Nicole Argentieri. She added that these proceedings and the resulting sentences ought to function as a deterrent. The division she represents will not hesitate to employ any means in its arsenal, inclusive of federal securities laws, to safeguard the integrity of cryptocurrency markets.
In September 2022, the U.S. Securities and Exchange Commission (SEC) launched a lawsuit against Kane and Hydrogen Technology Corporation. The allegation was that the former CEO manipulated the volume and price of Hydrogen's Hydro (HYDRO) token utilizing the company’s market maker. In April 2023, a judge in New York mandated both Kane and the company to reimburse $2.8 million in both remedies and civil penalties. At around the same period, the criminal charges against Kane and Hampton in the Southern District of Florida were revealed.
Kane conceded to one count each of conspiracy to manipulate securities prices and wire fraud, as well as two counts of wire fraud. He had been awaiting sentence since November 2023. Hampton was found guilty by a jury on similar charges in February. Andrew Chorlian and Tyler Ostern, two other former Hydrogen Technology executives who were complicit in the plot, confessed their guilt in May 2023.
The criminal case is another step in an intensified effort by U.S officials to scrutinize cryptocurrencies that the SEC identifies as securities. Pending civil cases against crypto companies, including Coinbase, Ripple, Kraken, and Binance, remain, yet the commission has reportedly given up on labeling Ether (ETH) as a security. On June 19, security firm Consensys stated that the SEC has no plans for enforcement action over Ether. The company filed a lawsuit against the SEC in April after noticing a Wells notice from the regulator.
Published At
6/25/2024 11:58:51 PM
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