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SEC Charges Crypto Company, Faces Serious Criticism 

The SEC and cryptocurrency dispute is still ongoing. The Hydrogen Technology Corporation has been charged by the US Securities and Exchange Commission with manipulating crypto asset securities. A Web3 and financial technology company called Hydrogen has created the Hydro native token.

The SEC asserts that by “manipulating the trading volume and prices” of Hydrogen, it made more than $2 million. Michael Ross Kane, the former CEO of Hydrogen, is also facing charges from the SEC. The CEO of the “Market making” business Moonwalkers, Tyler Ostern, has also been named by the Commission as a conspirator in the scheme.

The accused parties, according to the SEC, engaged in the sale of unregistered securities backed by cryptographic assets.

SEC Position Toward Crypto

Due to its oversight of the cryptocurrency ecosystem and regulation thereof, the SEC has been in the news. The sale of unregistered crypto tokens, which the SEC asserts are securities, is being strongly opposed by the agency. According to Gary Gensler, the chairman of the SEC, only Bitcoin qualifies as a commodity. Ethereum and other tokens might be covered by the SEC’s jurisdiction.

According to the SEC, Hydrogen used a number of strategies to distribute the token. It then collaborated with Moonwalkers, a market-making company based in South Africa, to manipulate the token’s price. Additionally, the SEC asserts that the token’s distribution method is unlawful.

The commission claims that Hydrogen sold tokens directly on cryptocurrency exchanges, through employee compensation, bounty programs, airdrops, and direct sales.

SEC Faces Serious Criticism

The SEC has come under fire from the cryptocurrency community for “regulation by enforcement”. In addition, experts contend that the SEC deliberately equivocates in the discussion of the definition of securities versus commodities.

The head of policy for the Blockchain Association, Jake Chervinsky, asserts that this is yet another instance of the commission’s overreach. He asserts that the SEC might be asserting that airdrops satisfy the Howey Test’s requirements. Chervinsky points out that this action alone cannot test the SEC’s theory on airdrops.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.