SEC wins $2.8M in a lawsuit for suspected manipulation of the price of crypto tokens.

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By Degen Lipsa

For allegedly running a price-fixing conspiracy, Hydrogen Technology Corp. and its former CEO will pay $2.8 million in fines and remedies, SEC.

A $2.8 million settlement has concluded a seven-month legal battle between the US securities regulator and a company accused of manipulating the price of cryptocurrencies.

In a litigation brought by the Securities and Exchange Commission (SEC), a New York District Court Judge decided against Hydrogen Technology Corporation and its former CEO Michael Ross Kane on April 20 and ordered them to pay $2.8 million in remedies and civil penalties.

The total includes more than $1 million in fines and around $1.5 million in “disgorged” profits, which are benefits from illegal activity.

Michael Kane, the CEO of Hydrogen, also consented to pay a $260,000 personal penalties. Prejudgment interest makes up the remaining sum.

The SEC filed a complaint in September alleging that Kane engaged in a plan to influence the volume and price of Hydrogen’s ERC-20 token, Hydro (HYDRO), by using market maker Moonwalkers Trading Limited.

The SEC alleged that Kane and Moonwalkers CEO Tyler Ostern colluded “to create the false appearance of robust market activity” after the distribution of Hydrogen’s Hydro tokens through airdrops, bounty programmes, and direct-to-market sales in 2018.

https://www.sec.gov/news/press-release/2022-175

In the SEC’s lawsuit, Ostern is accused of selling the tokens in a “artificially inflated market” that enabled Hydrogen to make more than $2 million.

One day after the complaint was filed, Ostern consented to resolve it for $41,000.

As a result of the settlement’s terms, Hydrogen and Kane are no longer permitted to contest the allegations made against them by the SEC.

Kane and the company are not allowed to sell any more cryptocurrencies until the Hydro tokens have passed the Howey test and obtained additional SEC permission.

Kane is still allowed to trade in the larger bitcoin market, so he is still free to do so for his own benefit.

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