Michael Kane, Virtual Asset Manipulation, Florida 2018

Related Federal Cases

Miami Woman Pleads Guilty to Identity Theft Scheme · Connecticut
Former Aequitas CEO Robert Jesenik Indicted in $100M Fraud Scheme · Oregon
Timothy Livingston Sentenced in $1.3M Spam & Hack Scheme · Texas
Endicott Gets 10 Months for Crypto SIM Swap Scheme · Texas
North Miami Man Sentenced to 3 Years for Identity Theft · Iowa

Table of Contents

Five Indicted for $2M Virtual Asset Manipulation Scheme, Miami FL, 2018-2019

A shocking scheme has been uncovered in Miami, Florida, where five individuals have been charged with manipulating the market for HYDRO, a virtual asset created by the Hydrogen Technology Corporation.

According to court documents, Michael Kane, 38, of Miami; Shane Hampton, 31, of Philadelphia; and George Wolvaardt, 38, of Johannesburg, South Africa, allegedly conspired to manipulate the market for HYDRO, a token on the Ethereum blockchain platform, and defraud market participants by creating the false appearance of supply and demand for HYDRO to induce other market participants to trade at prices, quantities, and times that they otherwise would not have traded.

The defendants allegedly used a trading bot to place thousands of orders that they did not intend to execute, or “spoof orders,” and thousands of orders where the bot bought and sold tokens to itself through the same account, or “wash trades.” The co-conspirators allegedly reaped $2 million in profit through their sales of HYDRO at artificially inflated prices.

As alleged in the indictment, Kane was the co-founder and CEO of Hydrogen Technology and Hampton was the Chief of Financial Engineering for the company. Wolvaardt was the Chief Technology Officer for Moonwalkers Trading Limited, a self-described “market-making” firm that purportedly designed the trading bot and was hired by Kane and Hampton to manipulate the market for HYDRO.

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

Each of the defendants faces a maximum penalty of five years in prison for conspiracy to commit securities price manipulation, 20 years in prison for wire fraud, and one count of conspiracy to commit wire fraud.

The FBI is investigating the case, and the U.S. Attorney’s Office for the Southern District of Florida is prosecuting the case. If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov.

An indictment and information are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.