The US Securities and Exchange Commission (SEC) is targeting many projects in the altcoin space. Most recently, he sued the company behind the coin, ruling that a cryptocurrency called Hydro was being offered as an unregistered security. Now the lawsuit is settled and the company is ordered to pay a $2.8 million fine to the SEC. Here are the details…
SEC settles $2.8 million with altcoin company
The SEC settled with Hydrogen for $2.8 million in a lawsuit extending through September 2022. The deal was upheld by a New York federal judge, and Hydrogen’s former CEO Michael Ross Kane also agreed to end the legal dispute. The lawsuit was filed against Hydro Technology Corp. and Kane for their role in conducting unregistered offers and sales of crypto securities called “Hydro”. The SEC also alleged that they manipulated the trading volume and price of these securities, which generated more than $2 million in revenue for Hydrogen.
As part of the settlement, Hydrogen agreed to pay a total of approximately $2.8 million, including approximately $1.5 million in profits and more than $1 million in penalties and interest. Kane also agreed to pay a fine of approximately $260,000. Both Hydrogen and Kane have adhered to settlement terms, which stipulate that they cannot confirm or deny allegations made against them.
The company will not be able to sell cryptocurrencies
Also, they will not be allowed to sell other cryptocurrencies unless they pass the Howey test and get SEC approval. With that, Kane will be able to continue trading cryptocurrencies for himself and enter the broader crypto market. According to the SEC’s complaint, Kane, who also controls Hedgeable Inc, an SEC-registered investment advisor, needed to raise fresh capital, which led to the establishment of Hydrogen during the highest bull market in December 2017. As we reported on Kriptokoin.com, in January 2018 Hydrogen minted more than 11 billion Hydro tokens, which were distributed as rewards to its employees, individual investors and promoters of the project.
In September 2022, the SEC announced that Hydro Technology Corp. and Kane, alleging that they paid a third party to manipulate its trade in order to artificially increase the price of the company’s Hydro token. A day after the complaint was filed, the third party in question, Tyler Ostern, reached a settlement to settle the case for $41,000. The deal with Hydrogen is part of the SEC’s crackdown on unregistered securities offerings and fraudulent activity in the cryptocurrency market. The SEC has warned that it will not hesitate to impose sanctions on those who violate securities laws.
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