๐จCrypto enthusiasts, buckle up! We've got some hot news! Two men, Shane Hampton and Michael Kane, have been sentenced for manipulating the price of Hydrogen Technology's cryptocurrency, HYDRO, and scheming to defraud investors. This marks the first time a federal jury has classified a cryptocurrency as a security and found that price manipulation of cryptocurrency constitutes securities fraud. ๐๏ธ๐ฐ
From October 2018 to April 2019, the duo used an automated trading bot to create fake and fraudulent orders on a U.S.-based cryptocurrency exchange. They conducted around $7 million in "wash trades" and placed over $300 million in "spoof trades" for HYDRO. This trickery led retail investors to purchase HYDRO at artificially inflated prices, resulting in the conspirators' profit of approximately $2 million over ten months. ๐ค๐ธ
Kane pleaded guilty to one count of conspiracy to commit securities price manipulation, one count of conspiracy to commit wire fraud, and two counts of wire fraud. Hampton was convicted of one count of conspiracy to commit securities price manipulation and one count of conspiracy to commit wire fraud. The jury unanimously determined that the defendants' sales of HYDRO were investment contracts, thus classifying the token as a security under federal securities law. ๐๐
Hampton, 32, of Philadelphia, received a sentence of two years and 11 months in prison. His co-conspirator, Michael Kane, 39, of Miami Beach, Florida, was sentenced to three years and nine months in prison. Let's hope this serves as a warning to others thinking of manipulating the crypto market! ๐๐ฎโโ๏ธ
