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In September of last year, the SEC initiated legal action against Hydrogen Technology Corporation and its CEO, Michael Ross Kane, for purportedly manipulating the price of the company’s proprietary token, HYDRO.
Established Market Value Manipulation
The allegations state that Kane utilized services from Moonwalkers Trading Ltd, a South African firm, without a clear legitimate business rationale to execute fraudulent trades involving the HYDRO token.
This led to a significant inflation of the HYDRO token’s price, far exceeding its true value, resulting in approximately $1.5 million in illicit profits for those involved.
Tyler Ostern, the CEO of Moonwalkers Ltd., was also implicated in the lawsuit. However, his involvement as a third party was deemed less significant by the SEC, and he promptly reached a settlement for $41,000.
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On April 20th, the court delivered a conclusive ruling regarding the consequences for Hydrogen Corp. and its CEO.
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As per court records, Hydrogen Technology and Michael Kane have a period of up to one year to remit over $2.6 million in fines and disgorgement fees, with the latter term referring to the legal restitution of unlawfully obtained profits.
Hydrogen Technology Corporation currently owes the SEC more than $1.5 million in disgorgement, over $244k in prejudgment interest, and a civil penalty exceeding $1 million. Additionally, Michael Ross Kane has been mandated to pay a distinct civil penalty of over $260k for his role in orchestrating the scheme.
Prohibited From Crypto-Related Business Activities
The presiding judge also informed Kane that he and any business entities under his control are prohibited from engaging in any further offerings of crypto assets, effectively preventing him from any future business transactions involving cryptocurrencies.
Nonetheless, Kane is allowed to buy, sell, and invest in cryptocurrencies through his personal account(s).
Defendants Hydrogen and Kane are each permanently restrained and enjoined from participating, directly or indirectly, including, but not limited to, through any entity controlled by defendants, in any offering of crypto asset securities; provided, however, that such injunction shall not prevent Kane from purchasing or selling crypto asset securities for his own personal account.
Moreover, Kane has been instructed to burn – or eliminate from the market through other means – all HYDRO tokens in his personal accounts and those controlled by his company.
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