One billion fraudulently created tokens: The Holograph case in court in Paris

One billion tokens created fraudulently, according to the prosecution. Three individuals have been appearing since Friday, October 16, before the Paris correctional court in the Holograph case. They are being prosecuted for their alleged involvement in an operation involving HLG tokens valued at 14 million dollars, or approximately 12.5 million euros, at the time of the events. The main defendant, a former employee of the company, is accused of modifying the rules for creating tokens before transferring them to his own wallet. Convenient, but obviously illegal!

Key Points

• A former employee of Holograph is suspected of generating one billion HLG without authorization.
• Three individuals are being tried in Paris; the main defendant has been in custody since September 2024.
• Holograph's lawyer claims the company is preparing for liquidation, while the defense disputes its cooperation during the investigation.

Holograph: A former employee accused of altering token creation

According to the facts presented at the opening of the trial and reported by AFP, the alleged operations took place between May and August 2024. The main defendant is a Ukrainian national residing in France, who had worked for Holograph Foundation, a company based in the Cayman Islands.

The prosecution accuses him of modifying the conditions allowing the creation of HLG tokens. He allegedly generated one billion tokens and then sent them to a wallet belonging to him. With the presumed help of the other two defendants, these assets were then distributed among several accounts on exchange platforms.

The described mechanism thus concerns an unauthorized issuance of new tokens, and not just the transfer of assets already held by users. In such incidents, the arrival of additional tokens can increase selling pressure and undermine confidence in the project's issuance rules.

However, the dispatch does not detail precisely the technical modifications attributed to the defendant. It does not allow, on its own, to establish which accesses, contract functions, or parameters were used. These elements must be distinguished from the general explanation of how a fraudulent issuance operates.

The main defendant is notably charged with violating an automated data processing system, fraud, and organized money laundering, as well as conspiracy. Arrested in Italy and then handed over to French authorities, he was incarcerated in September 2024. The other two individuals being prosecuted are appearing free, for money laundering and complicity. All remain presumed innocent.

A weakened project, a defense demanding documents

Beyond the contested transfers, the hearing addresses the economic consequences of the case. The arrival of fraudulently created tokens and their market launch have accompanied a collapse of HLG. Data cited by AFP places its price around 0.03 dollars in May 2024, compared to approximately 0.001 dollars at the end of December of the same year.

However, this comparison is not sufficient to measure the amounts actually obtained by the alleged perpetrators. The theoretical value of one billion tokens before their sale does not automatically correspond to the proceeds of their liquidation, especially when exchanges drive down the price.

At the hearing, Holograph's lawyer described a company now at a standstill and preparing for liquidation. He attributes this situation to the loss of client trust caused by the case. This is the position presented by the company, and not a conclusion already reached by the court.

For their part, the defendants' lawyers criticized Holograph's lack of cooperation during the investigation. They notably accuse it of not having communicated certain documents requested by the defense.

The resumption of hearings is scheduled for Thursday, October 22, and Friday, October 23. The case raises several distinct questions: responsibilities in the creation of tokens, their circulation, and the assessment of damages. The billion HLG constitutes the volume at the center of the accusations; it does not summarize, on its own, the financial consequences to be established.

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