A Florida judge sentenced Michael Caine, former CEO of Hydrogen Technology Corporation, to nearly four years in prison after pleading guilty.
According to an opinion from the U.S. Department of Justice, on June 24, a federal judge sentenced Kane to 45 months in prison for securities fraud related to a cryptocurrency price manipulation scheme. Shane Hampton, former head of financial engineering at Hydrogen Technology, was sentenced to 35 months in prison for similar offenses.
“(F)or the first time, a jury in a federal criminal trial found that cryptocurrency was a security and that manipulation of cryptocurrency prices constituted securities fraud,” the deputy said. -Senior Assistant Attorney General Nicole Argentieri. “This trial and today’s sentences 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 the securities markets. cryptocurrencies. »
The SEC filed suit against Kane and Hydrogen Technology in September 2022, alleging that the former CEO used the company’s market maker to perpetrate a scheme to manipulate the volume and price of the company’s Hydro (HYDRO) token. Company. In April 2023, a New York judge ordered Kane and the company to pay $2.8 million in damages and civil penalties. Around the same time, criminal charges against Kane and Hampton were announced in the Southern District of Florida.
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Kane pleaded guilty to one count of conspiracy to commit securities price manipulation, one count of conspiracy to commit wire fraud and two counts of wire fraud, and has been awaiting sentencing since November 2023. A jury convicted Hampton of similar charges in February. Two former Hydrogen Technology executives involved in the project, Andrew Kurlian and Tyler Osterne, pleaded guilty in May 2023.
Encryption in the courts
The criminal case was the latest move by U.S. officials to target cryptocurrencies, which the SEC considers securities within its jurisdiction. Although the commission has civil cases pending against cryptocurrency companies including Coinbase, Ripple, Kraken and Binance, it has reportedly abandoned attempts to classify Ethereum (ETH) as a security.
Security firm ConsenSys reported on June 19 that the SEC has no plans to take enforcement action against Ethereum. The company filed a lawsuit against the Securities and Exchange Commission in April after receiving a Wells notice from the regulator.
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