Apr 24, 2023
Hydrogen Technology Corp. Pays $2.8M to SEC in Crypto Manipulation Suit
The United States Securities and Exchange Commission (SEC) recently brought a close to a seven-month-long lawsuit with a $2.8 million payment. The lawsuit was between the SEC and a firm alleged to have manipulated the price of cryptocurrencies.
On April 20, a New York District Court Judge ruled against Hydrogen Technology Corporation and its former CEO Michael Ross Kane. The court ordered them to pay $2.8 million in remedies and civil penalties. The sum includes approximately $1.5 million in “disgorged” profits, a penalty of more than $1 million, and an individual fine of approximately $260,000 for Kane. The remaining amount is made up of prejudgement interest.
The SEC filed its complaint in September 2022, alleging Kane and Moonwalkers Trading Limited CEO Tyler Ostern used Hydrogen’s market maker to perpetrate a scheme that manipulated the volume and price of its ERC-20 token, Hydro (HYDRO). The SEC claimed Kane and Ostern created the false appearance of robust market activity following the distribution of Hydrogen’s Hydro tokens by way of airdrops, bounty programs and direct-to-market sales in 2018.
The complaint further stated Ostern sold the tokens in an “artificially inflated market” which saw Hydrogen net more than $2 million in profit. A day after the complaint was brought forward, Ostern agreed to settle the case for $41,000.
Kane and Hydrogen are now bound by the conditions of the settlement, which includes a prohibition on selling any additional cryptocurrency until the Hydro tokens have passed the Howey test and received further approval from the SEC. However, Kane is still permitted to participate in the wider cryptocurrency market.
The SEC’s lawsuit against Hydrogen Technology Corporation and its former CEO Michael Ross Kane is a major example of the agency’s efforts to protect investors from fraudulent activities in the crypto space. The settlement also highlights the importance of NFT marketing and promotion, as well as the need for companies to use a web3 agency or Twitter NFT marketing agency to ensure their activities are in compliance with the law.
The SEC’s action serves as a reminder that companies looking to sell NFTs must do so in a manner that is compliant with applicable laws and regulations. It also underscores the importance of using a reputable NFT marketing agency that has experience in the web3 space and can help companies navigate the complexities of the crypto industry.
The SEC’s lawsuit also serves as a warning to those looking to manipulate the market by artificially inflating the price of cryptocurrencies. The agency has made it clear that it will not tolerate such behavior, and those who engage in it will face serious consequences.
The outcome of the lawsuit is a reminder that companies must be diligent when it comes to selling NFTs and engaging in crypto-related activities. Companies should ensure they are compliant with the relevant laws and regulations and use a reputable NFT marketing agency to ensure their activities are in line with the law.
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