After a seven-month-long lawsuit, the court rule in favor of the US SEC.
The legal battle between the Securities and Exchange Commission (SEC) and Hydrogen Technology Corporation has finally come to an end.
According to the April 20th New York District Court Judge ruling, Hydrogen and its former CEO, Michael Ross Kane, will have to pay $2.8 million in remedies and civil penalties.
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Breaking down the settlement amount, roughly $1.5 million will be "disgorged" profits, the gains made from illegal activities. On top of that, the company is set to pay a $1 million penalty, with its CEO Michael Kane paying an individual fine of $260,000. The rest of the sum, around $40,000, consists of prejudgment interest.
The lawsuit started in September 2022, when the SEC filed a complaint against Kane, alleging that the man used Hydrogen's market maker, Moonwalkers Trading Limited, to manipulate the price and volume of Hydrogen's native token, Hydro (HYDRO).
In its lawsuit, the SEC claimed that Hydrogen's CEO and Moonwalkers CEO Tyler Ostern created a "false appearance of robust market activity" after distributing Hydro tokens through an airdrop, bounty programs, and direct-to-market sales.
Moreover, SEC believes that Ostern sold Hydro tokens in an "artificially inflated market," allowing Hydrogen to net over $2 million in profit. A day after the complaint was filed, Ostern settled the case for $41,000.
This case highlights the ongoing efforts by regulatory authorities to crack down on illicit activities in the cryptocurrency market, ensuring a fair and transparent trading environment for all market participants.
SEC continues to receive more and more pushback from crypto industry players. Recently, a Web3 capital firm Paradigm voiced concerns about the United States Securities and Exchange Commission's (SEC) crypto regulation strategy.
