The Securities and Exchange Commission (SEC) has emerged victorious in a lawsuit against Hydrogen Technology Corporation for alleged securities fraud. The case centered around the company’s promotion of an unused and unproven hydrogen technology, which the SEC claimed was merely a sham to raise money from investors. The court found that the company had made false and misleading statements in its SEC filings and ordered it to pay a fine and forfeit profits. This ruling serves as a warning to companies that engage in deceptive practices to raise capital and underscores the importance of transparency and compliance in the securities industry.
Hydrogen Technology Corporation and its CEO, Michael Ross Kane, were recently taken to court by the SEC for the alleged price manipulation of the firm’s proprietary token, HYDRO. The charges state that Kane used services offered by Moonwalkers Trading Ltd, a South African company, without a clear legitimate business purpose in order to conduct bogus trades using the HYDRO token. As a result, the price of HYDRO tokens soared way above their actual worth, netting everyone involved about $1.5 million worth of illegitimate profits.
On April 20th, the courts reached a final decision regarding the fate of Hydrogen Corp. and its CEO. According to court documents, Hydrogen Technology and Michael Kane have up to a year to pay over $2.6 million in fines and disgorgement fees. Hydrogen Technology currently owes the SEC more than $1.5 million in disgorgement 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.
In addition to the fines and penalties, Kane and Hydrogen Technology have been permanently restrained and enjoined from participating, directly or indirectly, including, but not limited to, through any entity controlled by defendants, in any offering of crypto asset securities. Kane is permitted to buy, sell, and invest in cryptocurrencies from his personal accounts, but he and any business entities he may control are forbidden from participating in further offerings of crypto assets.
Moreover, 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. The judge presiding over the case also informed Kane that any business entities he may control are forbidden from participating in further offerings of crypto assets, effectively barring him from business deals that involve cryptocurrencies forever.
In conclusion, the Hydrogen Technology case is a prime example of how the SEC is cracking down on price manipulation of crypto assets. This case serves as a reminder to others who might be tempted to engage in such practices that the penalties are severe and can have long-term consequences on their business ventures.