Cryptocurrency Conspiracy: Finance boss convicted of $300 million securities price manipulation, wire fraud

2 views 10:00 am 0 Comments February 20, 2024

A federal jury in the Southern District of Florida convicted a Pennsylvania man today for manipulating the price of a security and scheming to defraud investors in connection with the purchase of Hydrogen Technology’s cryptocurrency, HYDRO.

According to court documents and evidence presented at trial, Shane Hampton, 32, of Philadelphia, served as the head of financial engineering at Hydrogen Technology and orchestrated a months-long scheme to manipulate the price of HYDRO. 

Hampton and his co-conspirators hired an outside firm, Moonwalkers Trading Limited of South Africa, to run an automated trading system or “bot” to manipulate the price of HYDRO on a cryptocurrency exchange in the United States by flooding the market with fake and fraudulent orders from October 2018 to April 2019. 

Hampton and his co-conspirators executed approximately $7 million in “wash trades” and placed over $300 million in “spoof trades” for HYDRO through the bot. 

Collectively, these spoof and wash trades were designed to, and did, fraudulently induce retail investors to purchase HYDRO so that Hampton and his co-conspirators could sell Hydrogen Technology’s own holdings of HYDRO for over $1.5 million over the course of a seven-month period. 

The jury convicted Hampton of conspiracy to commit securities price manipulation and conspiracy to commit wire fraud. He is scheduled to be sentenced on April 29 and faces a maximum penalty of five years in prison for the conspiracy to commit securities price manipulation conviction and 20 years in prison for the conspiracy to commit wire fraud conviction. 

A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Hampton is the fourth defendant to be convicted as part of the case. 

Michael Kane, the CEO of Hydrogen Technology, pleaded guilty to the same charges and is awaiting sentencing; Andrew Chorlian, an engineer at Hydrogen Technology, also pleaded guilty to conspiracy to commit securities price manipulation and wire fraud and is awaiting sentencing; and Tyler Ostern, the CEO of Moonwalkers Trading Limited, also pleaded guilty to conspiracy to commit securities price manipulation and wire fraud and has been sentenced to two years in prison. 

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Markenzy Lapointe for the Southern District of Florida, and Assistant Director Michael D. Nordwall of the FBI’s Criminal Investigative Division made the announcement.

The FBI Miami Field Office investigated the case. Former Assistant U.S. Attorney Eric Morales for the Southern District of Florida assisted in the investigation of the case.

Trial Attorney Andrew Jaco and Assistant Chief Scott Armstrong of the Criminal Division’s Fraud Section are prosecuting the case.