Hydrogen execs jailed for manipulating HYDRO crypto price; Ethereum Foundation’s Mailing List Leaked

A federal Florida judge has sentenced Michael Kane, the chief executive of Hydrogen Technology Corporation, a New York-based crypto firm, to nearly four years in prison for manipulating the price of HYDRO, a token issued by Hydrogen.

In a Jun. 25 press release, the Justice Department said that Shane Hampton, who was the head of financial engineering at Hydrogen was sentenced to two years and 11 months in prison, while Michael Kane was sentenced yesterday to three years and nine months in prison.

Nicole M. Argentieri, head of the Justice Department’s criminal division, says Hampton and Kane orchestrated a fraud scheme by using a “trading bot to manipulate the price of their company’s cryptocurrency.”

“In this case, for the first time, a jury in a federal criminal trial found that a cryptocurrency was a security and that manipulating cryptocurrency prices was securities fraud.”

Nicole M. Argentieri

According to court documents, Kane and Hampton hired Moonwalkers Trading Limited, a South African firm, to manipulate HYDRO’s price on a U.S.-based crypto exchange. Although the name of the crypto exchange wasn’t specified in the press release, prosecutors say the bot used by Moonwalkers Trading “flooded the market with fake and fraudulent orders from October 2018 to April 2019.”

Prosecutors also claim Kane, Hampton, and their co-conspirators executed approximately $7 million in “wash trades” and placed over $300 million in “spoof trades” for HYDRO through the bot. This manipulation allowed them to make around $2 million in profits from selling HYDRO over about 10 months, the press release reads.

In September 2022, the U.S. Securities and Exchange Commission (SEC) charged Kane and Tyler Ostern, the chief executive of Moonwalkers Trading Limited, for their roles in “effectuating the unregistered offers and sales of crypto asset securities.”

Ethereum Foundation’s Mailing List Leaked: Vulnerability in SendPulse

Ethereum core developer Tim Beiko reported that the Ethereum Foundation’s mailing list was leaked due to a vulnerability in SendPulse, the email automation service used by the foundation.

An attacker exploited this to send phishing emails from [email protected] to subscribers.

The foundation has since restricted access to the mailing list, according to the latest update by Bieko, who further urged users not to click any links sent from that email.

“PSA: it seems like the mailing list provider the EF uses for “[email protected]” has been compromised. We are currently trying to reach @SendPulseCom to resolve the issue. Please don’t click any links sent from that email. “

Users, too, confirmed receiving fraudulent emails.

Phishing attacks have become increasingly common. Last year, the X account of Ethereum co-founder Vitalik Buterin was hacked by scammers who posted a fake NFT giveaway prompting users to click a malicious link, resulting in victims losing around $800,000.

Buterin later confirmed that the hack was the result of a SIM swap attack.

More recently, cryptocurrency portfolio tracker CoinStats disclosed that it had experienced a phishing attack affecting 1,590 cryptocurrency wallets, which represented 1.3% of all its wallets. As a result, the company temporarily shut down its application.

Additionally, SlowMist founder Yu Xian revealed that the TON blockchain ecosystem had become an appealing target for phishing attacks due to its explosive surge this year.

The exec explained that Telegram accounts that were opened using anonymous numbers are more prone to such attacks.