In a landmark decision, the United States Securities and Exchange Commission (SEC) has won its lawsuit against Hydrogen Technology Corporation and its CEO, Michael Ross Kane. The case centered around the alleged price manipulation of the firm’s proprietary token, HYDRO, resulting in illegitimate profits worth $1.5 million. Here’s a breakdown of the court’s decision and its implications.
The SEC accused Michael Ross Kane of using Moonwalkers Trading Ltd, a South African company, for bogus trades using the HYDRO token. This caused the token’s price to soar above its actual worth, netting everyone involved $1.5 million worth of illegitimate profits.
Tyler Ostern, CEO of Moonwalkers Ltd., was also charged in the lawsuit, but his role as a hired party was not as important to the SEC, and he settled with them for $41,000.
The Court’s Final Decision
On April 20th, the court reached its final decision regarding the fate of Hydrogen Technology and Michael Kane. According to court documents, the defendants have up to a year to pay over $2.6 million in fines and disgorgement fees, the latter being the legal term for restitution of unlawfully made profits.
Hydrogen Technology Corporation owes the SEC more than $1.5 million in disgorgement, prejudgment interest worth over $244k, and a civil penalty of over $1 million. Michael Ross Kane has also been ordered to pay a separate civil penalty of over $260k for his coordinating role in the scheme.
Ban from Crypto-Related Business Ventures
The judge presiding over the case also informed Kane that he and any business entities he may control are forbidden from participating in further offerings of crypto assets. This effectively bars him from business deals involving cryptocurrencies forever. However, Kane is permitted to buy, sell, and invest in cryptocurrencies from his personal account(s).
Kane has been ordered to burn or remove from the market by other means all HYDRO tokens in his personal accounts and the accounts his company controls. This means that any remaining HYDRO tokens are now worthless.
Implications of the Decision
The decision is a significant victory for the SEC and a warning to others who may consider engaging in price manipulation schemes. It also highlights the importance of transparency in the cryptocurrency market and the need for regulatory oversight.
Furthermore, the decision could impact the future of cryptocurrency-related business ventures. With Kane barred from participating in such ventures, other individuals and companies may also face similar restrictions if found guilty of similar activities.