The U.S. Securities and Exchange Commission accused the heads of Hydrogen Technology Corporation and Moonwalkers Trading Limited of illegally selling crypto assets called Hydro and manipulating the market.
The SEC has filed a complaint in Manhattan federal district court against Michael Ross Kane, former CEO of New York-based fintech company Hydrogen Technology, and Tyler Ostern, CEO of South African company Moonwalkers Trading. According to a press release from the regulator, since January 2018, Hydrogen has been publicly distributing the Hydro token, paying rewards to individuals for its promotion, as well as through direct sales on marketplaces.
In October 2018, Kane enlisted Moonwalkers to create false market activity with Hydro through the use of custom software or a trading bot. Thus, officials say, Kane tried to mislead investors by artificially inflating the market, and as a result of these actions, Hydrogen made more than $ 2 million in profits. Given that Hydrogen did not register with the SEC, the regulator believes that the sale of Hydro violated US securities laws .
The agency also accused Kane and Ostern of fraud and market manipulation, and therefore demanded an injunction against the activities of their organizations, the withdrawal of invested funds with interest for the period before the court decision, as well as the payment of an administrative fine. Ostern did not admit or deny the regulator’s accusations, agreeing to pay $36,750 and $5,118 in interest. The amount of the fine will be determined later by the court.
“Companies will not be able to avoid liability for violating federal laws by selling unregistered securities and offering them as a reward. The SEC will crack down on these illegal fundraising schemes to protect investors,” said SEC Deputy Director of Enforcement Carolyn M. Welshhans.
Last week, the US regulator fined the Sparkster platform $35 million for conducting an unregistered ICO in 2018. At the beginning of the month, the cryptocurrency project Chicago Crypto Capital faced the same accusation.
Source: Bits
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