The lawsuit, which lasted for seven months, came to a close on April 20th, 2023, with the ruling against Hydrogen and Kane in a suit brought by the Securities and Exchange Commission (SEC). The SEC filed a complaint in September 2022, alleging that Kane used Hydrogen's market maker Moonwalkers Trading Limited to perpetrate a scheme that manipulated the volume and price of its ERC-20 token Hydro (HYDRO). The scheme reportedly created a false appearance of robust market activity and saw Hydrogen net more than $2 million in profit. The SEC claimed that Kane and Moonwalkers CEO Tyler Ostern worked together to manipulate the market following the distribution of Hydrogen’s Hydro tokens by way of airdrops, bounty programs, and direct-to-market sales in 2018. The SEC alleged in its complaint that Ostern sold tokens in a market that was artificially inflated, resulting in significant profits for Hydrogen. Shortly after the complaint was filed, Ostern settled the case for $41,000. However, Hydrogen and Kane were still bound by the conditions of the settlement, which barred them from further disputing the charges that have been levied against them by the SEC. As part of the settlement, Kane agreed to pay an individual fine of approximately $260,000. $1.5M of "disgorged" profits and a $1M penalty make up the sum paid by Kane. The remaining amount is pre-judgment interest. The settlement reached between the SEC and Hydrogen Technology Corp, and its former CEO Michael Ross Kane, includes a prohibition on selling cryptocurrency until SEC approval is granted after passing the Howey test. However, Kane is still permitted to participate in the wider cryptocurrency market, meaning he can still buy and sell crypto assets for personal gain. In conclusion, the ruling against Hydrogen and Kane is a reminder that the SEC is actively monitoring the cryptocurrency market to prevent fraudulent activities. This lawsuit highlights the importance of transparency and honesty in the cryptocurrency industry and serves as a warning to those who attempt to manipulate the market for their own gain.Hydrogen Technology Corporation and its former CEO Michael Ross Kane have been ordered by a New York District Court Judge to pay $2.8 million in remedies and civil penalties for manipulating the price of cryptocurrencies.
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