A seven-month lawsuit between US securities regulators and a company allegedly manipulating cryptocurrency prices has concluded with a $2.8 million payment.
On April 20, a New York district court judge ruled against Hydrogen Technology Corporation and its former CEO, Michael Ross Kane, in a lawsuit brought by the US Securities and Exchange Commission (SEC), ordering them to pay $2.8 million in residential measures and civil penalties. The sum included approximately $1.5 million in "turned-up" profits (referring to proceeds from illegal conduct) and fines of more than $1 million.
Additionally, Hydrogen CEO Michael Cain agreed to pay a personal penalty of approximately $260,000. The remaining amount is made up of estimated interest. The SEC filed a complaint in September alleging that Kane used Hydrogen's market maker, Moonwalkers ry Trading Limited, to to manipulate the volume and price of its ERC-20 token, Hydro (HYDRO).
After distributing Hydrogen's Hydro tokens through airdrops, bounty programs and direct-to-market sales in 2018, Kane and Moonwalkers CEO Tyler Ostern worked to “create the illusion of strong market activity,” the SEC allegations. Ostern sold tokens in an “artificially inflamed market,” netting Hydrogen more than $2 million, according to the SEC’s complaint.
A day after the complaint was filed, Ostern agreed to settle the case for $41,000. Both Hydrogen and Kane are now bound by settlement conditions that prohibit them from further contesting the charges levied against them by the SEC.
Kane and company will be prohibited from selling any additional cryptocurrencies until the Hydro tokens pass the Howey test and receive further approval from the SEC. Kane is still allowed to participate in the broader cryptocurrency market, meaning he can still buy and sell crypto personal assets for gain.
