In September, the SEC sued Hydrogen Technology Corporation and its CEO, Michael Ross Kane, for alleged price manipulation of the firm’s proprietary cryptocurrency, HYDRO.
According to the accusations, Kane utilized Moonwalkers Trading Ltd, a South African corporation, without a clear legitimate business purpose to make false trades using the HYDRO token.
This led the price of HYDRO tokens to skyrocket much over their actual value, bringing everyone involved almost $1.5 million in illicit profits. The complaint also named Tyler Ostern, the CEO of Moonwalkers Ltd., as a defendant. However, his role as a hired party was not as crucial to the SEC, and he swiftly settled for $41,000.
The courts rendered a final judgment on the fate of Hydrogen Corp. and its CEO on April 20th. According to court filings, hydrogen Technology, and Michael Kane have up to a year to pay over $2.6 million in fines and disgorgement fees, which is the legal phrase for restitution of illegally obtained earnings.
Hydrogen Technology Corporation currently owes the SEC over $1.5 million in disgorgement, over $244k in prejudgment interest, and a civil penalty of over $1 million. Michael Ross Kane has also been compelled to pay a separate civil penalty of almost $260,000 for his role in the scheme’s coordination.
Kane was also instructed by the judge presiding over the case that he and any company organizations he may control are barred from participating in subsequent offerings of crypto assets, thereby preventing him from any future commercial agreements involving cryptocurrency.
On the other hand, Kane is permitted to buy, trade, and invest in cryptocurrency using his account(s). Defendants Hydrogen and Kane are permanently restrained and enjoined from participating, directly or indirectly, in any offering of crypto asset securities, including, but not limited to, through any entity controlled by defendants, provided, however, that such injunction shall not prevent Kane from purchasing or selling crypto asset securities for his account.
Furthermore, Kane has been ordered to burn – or otherwise remove from the market – all HYDRO tokens in his personal and company accounts.