According to law enforcement officials, Shane Hampton utilized an automated trading bot provided by a third-party company to manipulate the Hydro rate on a prominent American cryptocurrency exchange. From October 2018 to April 2019, deceptive token orders were placed, resulting in fictitious transactions amounting to $7 million, with $300 million being attributed to Hydro tokens alone. This fraudulent activity enticed retail investors to purchase the tokens, leading to Hydrogen Technology selling its inventory of coins for $1.5 million within seven months.
Hampton is expected to receive his sentencing on April 29th. He could face up to five years in prison for stock manipulation and 20 years in prison for conspiracy to commit wire fraud.
Hydrogen Technology has been involved in previous legal disputes with the US Securities and Exchange Commission (SEC). In the past, the company was ordered by a court to pay a $2.8 million fine due to its CEO, Michael Kane, being found guilty of manipulating the price of its own token and engaging in illegal profiteering. Additionally, Hydrogen Technology engineer Andrew Chorlian has also pleaded guilty to fraud charges. Kane and Chorlian are awaiting their respective sentencing.
Not only is the SEC targeting the individuals behind fraudulent cryptocurrency schemes, but they are also pursuing major cryptocurrency exchanges such as Coinbase and Binance. Bloomberg analyst Elliott Stein believes that Coinbase stands a strong chance of prevailing against the regulator in court.