Regulation
US Court Declares Crypto Safe, Convicts Executives
Two Hydrogen Technology executives were convicted this week for their roles in a sophisticated scheme involving cryptocurrency securities fraud.
This case marks the first case where a cryptocurrency has been officially recognized as a cryptocurrency. security by a federal jury. This could set a legal precedent for how securities laws apply to digital assets, providing a clearer framework for entrepreneurs and investors.
Hydrogen tech executives face prison sentence
Shane Hampton, 32, of Philadelphia, was sentenced to two years and 11 months. While his co-conspirator, Michael Kane, 39, from Miami Beach, was sentenced to three years and nine months.
According to the U.S. Department of Justice, the duo, along with other co-conspirators, used sophisticated methods to manipulate the market price of their company’s cryptocurrency, HYDRO. Their tactics included the employment of a trading robotwhich generated fake orders on a major US cryptocurrency exchange, artificially inflating the price of HYDRO.
Learn more: Crypto Scam Projects: How to Spot Fake Tokens
From October 2018 to April 2019, Kane, Hydrogen Technology’s CEO, and Hampton, its head of financial engineering, implemented manipulative schemes that included approximately $7 million in “laundering transactions” and more than $300 million in “fraudulent transactions.”
These deceptive schemes successfully lured investors into purchasing the HYDRO token, resulting in the conspirators making approximately $2 million in illicit profits in just 10 months.
Principal Assistant Attorney General Nicole M. Argentieri emphasized the seriousness of this matter.
“In this case, for the first time, a jury in a federal criminal trial found that a cryptocurrency was a security and that manipulation of cryptocurrency prices constituted securities fraud. “This prosecution and the sentences imposed today should serve as a warning that the Criminal Division will not hesitate to use every tool at its disposal, including the federal securities laws, to protect the integrity of securities markets. cryptocurrency”, Argentieri said.
The case is part of a broader crackdown by U.S. authorities on illicit cryptocurrency practices. In April, another major conviction was handed down in Irina Dilkinska, former head of legal at OneCoin. She faced a four-year prison sentence for her role in a massive pyramid scheme that exploited millions of people.
Additionally, Changpeng Zhao, the former CEO of Binance, also faced legal consequences this year. On June 1, he began serving a sentence four-month prison sentence at the Federal Correctional Institution in Lompoc, California. Last year, Zhao pleaded guilty for failing to implement an adequate anti-money laundering program at Binance.
Learn more: Who is Changpeng Zhao? A Deep Dive into the Former Binance CEO
These developments reflect increasing oversight and regulation of the cryptocurrency industry by U.S. law enforcement, which aims to protect investors and maintain market integrity.
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