The market-making company Hydrogen is being sued by the Securities and Exchange Commission (SEC) for allegedly manipulating the trading volume of its Hydro token in order to raise more than $2 million.
CEOs of Moonwalker and Hydrogen, Michael Kane and Tyler Ostern, were also accused of participating in the crime. The “Hydro” token, which the defendants allegedly offered as unregistered securities, had a price that was inflated on purpose so that it could be resold to unwary investors.
The SEC claims that Kane and Hydrogen developed and offered the Hydro coin in 2018. Through employee remuneration, bounty schemes, and airdrops, the tokens were made available to the general public.
In order to increase the trading volume of the Hydro token, Hydrogen allegedly conspired with the South African company Moonwalker. Over $2 million in investor money was collected by Hydrogen thanks to the fictitious market activity.
The SEC is dedicated to preserving fair markets for all securities and will continue to discover and hold market manipulators responsible. As we claim, defendants made money through their manipulation by painting a false picture of Hydro’s market activity.
The CEO of Moonwalker, Tyler Ostern, has agreed to pay a $36,750 punishment and is disqualified from taking part in future securities offerings, according to the SEC. Kane and Ostern will make a further appearance to present their case in federal district court in Manhattan.