- Two former executives of Hydrogen Technology in the United States have been convicted for manipulating the price of the company’s cryptocurrency.
- The US Department of Justice has revealed that Michael Kane, the former CEO of Hydrogen, was sentenced to three years and nine months; his accomplice Shane Hampton received a sentence of two years and eleven months.
- According to the Department’s announcement, this marks a precedent-setting case where a U.S. jury determined that a cryptocurrency constitutes a security under the law.
This groundbreaking case may set a new standard in how crypto market manipulation is perceived and prosecuted.
Hydrogen Executives Found Guilty of Crypto Market Manipulation
The court’s ruling outlined how executives from Hydrogen Technology collaborated with Moonwalkers Trading Ltd. to inflate the price of their proprietary cryptocurrency, Hydro. They leveraged a cryptocurrency exchange to facilitate this scheme.
Manipulative Trading Practices Used
The partnership engaged in approximately $7 million worth of wash trading and executed over $300 million in spot transactions through a bot, as part of their market manipulation activities.
A Landmark Decision for U.S. Securities Law
The Department of Justice stated that Hampton’s case was the first jury trial where it was conclusively ruled that a cryptocurrency could be considered a security. This could significantly impact future regulatory actions and legal interpretations surrounding digital assets.
Background and Legal Proceedings
The U.S. Securities and Exchange Commission (SEC) had charged Hydrogen and Kane with market manipulation back in September 2022, based on activities occurring between 2018 and 2019. The jury unanimously agreed that the transactions involving HYDRO were investment contracts, thus subjecting them to securities laws.
Conclusion
This case underscores the increasing scrutiny that regulatory bodies, such as the SEC and DOJ, are applying to the cryptocurrency market. As the industry continues to mature, compliance with securities laws and ethical trading practices will be paramount for companies and individuals alike. The ramifications of this case will likely shape the legal landscape for future crypto ventures.
