Miami Crypto CEO Among 5 Defendants in $2 Million Manipulation Scheme

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MIAMI The co-founder of a Miami-based cryptocurrency firm was among five men charged in a $2 million manipulation scheme, federal prosecutors announced Monday.

Michael Kane, 38, was the co-founder and CEO of Hydrogen Technology.

He, along with Shane Hampton, 31, from Philadelphia, and George Wolvaardt, 38, from Johannesburg, South Africa, are accused of attempting to manipulate the market for HYDRO, a token on the Ethereum blockchain platform. .

The trio defrauded market participants by creating a false appearance of supply and demand for HYDRO in order to entice (others) to trade at prices, quantities and times they otherwise would not have traded , according to a press release from the US Department of Justice.

Prosecutors said Kane, Hampton and Wolvaardt used a trading bot to place thousands of orders they had no intention of executing, or spoofed orders, and thousands of orders where the bot was buying and selling tokens through the same account, or washing trades.

Wolvaardt was the chief technology officer of Moonwalkers Trading Limited, a self-proclaimed market-making company that allegedly designed the trading robot and was hired by Kane and Hampton to manipulate the market for HYDRO, prosecutors said.

The three were able to earn $2 million from the sale of HYDRO at artificially inflated prices, prosecutors claimed.

Tyler Ostern, 29, of Coos Bay, Oregon, former CEO of Moonwalkers, and Andrew Chorlian, 29, of New York, a blockchain engineer at Hydrogen Technology, were also charged in the scheme.

Prosecutors charged Kane, Hampton and Wolvaardt with one count of conspiracy to commit securities price manipulation, one count of conspiracy to commit wire fraud and two counts of wire fraud. The three could spend decades in prison, officials said.

Ostern and Chorlian each faced counts of conspiracy to commit securities price manipulation and wire fraud. Prosecutors said both men could spend up to five years behind bars.

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