Two founders of a project that released a token called HYDRO are headed to prison.
Why it matters: The Justice Department has put market manipulators on notice.
Driving the news: Shane Hampton and Michael Kane received prison sentences (the former for just under three years, the latter for just under four).
The gist of the complaint against them: Contracting to spin up fake volume to make it look like people wanted their token.
Kane pleaded guilty last year and Hampton wasconvicted in the Southern District of Florida in February. In total, four men have been convicted of various charges, from price manipulation to wire fraud.
Between the lines: It's hard to say what the Hydrogen project was really aiming to do, but based on an archived version of its site (now taken down), it seems to be a bit of a blockchain riff on Stripe.
💭 Brady's thought bubble: I've seen some unconvincing explainer videos for blockchain projects, but — seriously — to anyone who made it 20 seconds into Hydrogen's promo vid and thought these guys were even slightly credible: Please stick to mutual funds.
Flashback: We flagged Hydrogen in our newsletter when the SEC cracked down on it in September 2022.
At the time, Kane told Axios that the case "wholly lacked merit."
What we're watching: Hampton was found guilty of securities fraud, meaning a jury found HYDRO was a security.
