A seven-month lawsuit between the United States securities regulator and a company that allegedly manipulated the price of cryptocurrencies has come to an end with a payment of USD 2.8 million.
On April 20, A New York District Court judge ruled against Hydrogen Technology Corporation and its former CEO, Michael Ross Kane, in a lawsuit filed by the Securities and Exchange Commission (SEC), ordering them to pay $2.8 million in damages and civil penalties.
The sum includes approximately USD 1.5 million in “degorged” benefits -which refers to the profits obtained from illegal conduct-, as well as a fine of more than one million dollars.
Furthermore, the CEO of Hydrogen, Michael Kane, agreed to pay an individual penalty of approximately $260,000. The remaining amount corresponds to default interest.
The SEC filed its complaint in September, alleging that Kane used Hydrogen’s market maker, Moonwalkers Trading Limited, to perpetrate a scheme that manipulated the volume and price of its ERC-20 token, Hydro (HYDRO)..
The SEC alleged that Kane and Moonwalkers CEO Tyler Ostern worked “to create the false appearance of robust market activity” following Hydrogen’s distribution of Hydro tokens. through launches, rewards programs, and direct-to-market sales in 2018.
We announced charges against The Hydrogen Technology Corporation, its former CEO, Michael Ross Kane, and CEO of Moonwalkers Trading Limited, Tyler Ostern, for unregistered offers, sales, and manipulation of crypto asset securities called “Hydro.”
— US Securities and Exchange Commission (@SECGov) September 30, 2022
We are announcing charges against The Hydrogen Technology Corporation, its former CEO Michael Ross Kane, and Moonwalkers Trading Limited CEO Tyler Ostern for unregistered offerings, sales, and value manipulation of crypto assets called “Hydro.”
According to the SEC’s complaint, Ostern sold the tokens in an “artificially inflated market” which allowed Hydrogen to net more than $2 million in profit.
One day after the complaint was filed, Ostern agreed to settle the case for $41,000..
Both Hydrogen and Kane are now bound by the terms of the settlement, which prohibits them from further disputing the charges. that the SEC has charged them with.
Kane and the company will be prohibited from selling any other cryptocurrency until the Hydro tokens have passed the Howey test and received SEC approval..
Kane is still allowed to participate in the broader cryptocurrency marketwhich means that you can continue to buy and sell crypto assets for your personal benefit.
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