The Securities and Exchange Commission (SEC) has obtained final consent judgments against The Hydrogen Technology Corporation, its former CEO, Michael Ross Kane, and Tyler Ostern, CEO of Moonwalkers Trading Limited. The SEC’s case involved the offering of unregistered securities in regard to the issuance of Hydro – a “crypto asset security.”
The SEC adds that the offering perpetrated a “scheme to manipulate the trading volume and price of those securities, which yielded more than $2 million for Hydrogen.”
The settlement requires Hydrogen and Kane to pay almost $3 million in disgorgement, prejudgment interest, and penalties.
The SEC’s complaint claims that starting in January 2018, the firm launched the Hydro token, which was disseminated to the public.
The company distributed Hydro through an airdrop of tokens in February 2018 and again beginning in May 2018. Hydrogen also offered a bounty program and distributed the tokens to employees as compensation. The crypto also traded on trading platforms.
Moonwalkers, based in South Africa, was hired to “create the false appearance of robust market activity for Hydro through the use of Moonwalkers’s customized trading software and then sold Hydro into that artificially inflated market for profit on Hydrogen’s behalf.”
Without admitting or denying the SEC’s allegations, Hydrogen and Kane consented to the entry of final judgments.
Hydrogen was ordered to pay disgorgement of $1,516,703.53 with prejudgment interest of $244,531.98 and a civil penalty of $1,035,000, and Kane was ordered to pay disgorgement of $45,818.79 with prejudgment interest of $7,387.25 and a civil penalty of $207,000 and was prohibited from acting as a director or officer of a public company.
The court previously entered a judgment by consent against Ostern on September 29, 2022, ordering him to pay $36,750 in disgorgement and prejudgment interest of $5,118, with civil monetary penalties to be determined at a later date by the court.
As part of the settlement, Ostern has consented to a final judgment that does not impose civil monetary penalties as a result of his cooperation with the SEC’s investigation, thereby making the terms of that September 2022 judgment final.