Hydrogen Technology Corp. and its former CEO, Michael Ross Kane, have been ordered to pay $2.8 million in fines and remedies for their alleged involvement in a price manipulation scheme. The Securities and Exchange Commission (SEC) filed a lawsuit against the firm in September, claiming that Kane had used Hydrogen’s market maker, Moonwalkers Trading Limited, to manipulate the volume and price of its ERC-20 token, Hydro (HYDRO), in 2018. The SEC alleged that Kane and Moonwalkers CEO, Tyler Ostern, worked to create the appearance of robust market activity, leading to an artificially inflated market that netted Hydrogen over $2 million in profit.
On April 20, a New York District Court Judge ruled against Hydrogen and Kane, ordering them to pay approximately $1.5 million in “disgorged” profits and over $1 million in penalties. Kane agreed to pay an individual fine of around $260,000, and the remaining amount is made up of prejudgment interest. Ostern settled the case for $41,000 a day after the complaint was filed.
As part of the settlement, Hydrogen and Kane are prohibited from disputing the charges and from selling any additional cryptocurrency until Hydro tokens have passed the Howey test and received further approval from the SEC. Kane, however, is still allowed to participate in the wider cryptocurrency market, meaning he can buy and sell crypto assets for personal gain.
