SEC Wins $2.8 Million In Crypto Price Manipulation Lawsuit

The Securities & Exchange Commission (SEC) has just won $2.8 million in a 7-month-long crypto price manipulation lawsuit against Hydrogen Technology Corporation, and its former CEO Michael Ross Kane. 

A New York District Court Judge ruled in favor of the SEC, and the sum includes approximately $1.5 million in disgorged profits, which refers to gains made from unlawful conduct, as well as a penalty of over $1 million. In addition, Kane agreed to pay an individual fine of around $260,000.

The SEC filed its complaint in September, alleging that Kane had used Hydrogen’s market maker, Moonwalkers Trading Limited, to carry out a scheme that manipulated the volume and price of its ERC-20 token, Hydro (HYDRO). The SEC claimed that Kane and Moonwalkers CEO Tyler Ostern worked together to create a false appearance of robust market activity following the distribution of Hydro tokens through airdrops, bounty programs, and direct-to-market sales in 2018.

According to the SEC’s complaint, Ostern sold the tokens in an artificially inflated market, resulting in Hydrogen netting over $2 million in profit. Just a day after the complaint was brought forward, Ostern settled the case for $41,000.

As part of the settlement, both Hydrogen and Kane are now bound by the conditions that prohibit them from disputing the charges levied against them by the SEC. Kane and the firm are also prohibited from selling any additional cryptocurrency until the Hydro tokens have passed the Howey test and received further approval from the SEC.

However, Kane is still allowed to participate in the wider cryptocurrency market, which means he can still buy and sell crypto assets for personal gain.

This case serves as a reminder of the importance of regulatory compliance in the cryptocurrency industry. Price manipulation and other unlawful activities can have severe consequences, as evidenced by the significant fines and penalties imposed on Hydrogen and its former CEO. It also highlights the SEC’s commitment to protecting investors and maintaining the integrity of the market.