Crypto: SEC accuses Hydrogen of making $2 million by manipulating the market

© Reuters – The Securities and Exchange Commission (SEC) has filed a lawsuit against market-making firm Hydrogen for allegedly manipulating the trading volume of its Hydro token to raise more than $2 million.

Hydrogen CEO Michael Kane and Moonwalker CEO Tyler Ostern were also named as accomplices to the crime. The defendants allegedly sold unregistered securities, the “Hydro” token, the price of which they intentionally inflated in order to resell it to unsuspecting investors.

According to the SEC, Kane and Hydrogen created and sold the Hydro token in 2018. The tokens were distributed publicly through airdrops, bounty programs, and employee compensation.

Hydrogen reportedly colluded with South Africa-based Moonwalker to inflate the trading volume of the Hydro token. The pseudo-market activity allowed Hydrogen to cash in over $2 million of investor funds.

“As we allege, defendants profited from their manipulation by creating a misleading picture of Hydro’s market activity. The SEC is committed to ensuring fair markets for all types of securities and will continue to expose and hold market manipulators accountable.”

According to the SEC, Moonwalker CEO Tyler Ostern has agreed to pay a $36,750 fine and is barred from participating in future securities offerings. Kane and Ostern will appear in federal district court in Manhattan at a later date to argue their case.

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