Suspected Price Manipulation: SEC Wins $2.8M In a Lawsuit

  • SEC claimed Kane conspired to create a false appearance of a robust market
  • The SEC was awarded $2.8 million in a cryptocurrency lawsuit

A cryptocurrency company was sued for $2.8 million by the U.S. Securities and Exchange Commission (SEC), which claimed that it had manipulated the price of a token it had produced. The organization said that Luminar Technologies, a company, had participated in a nefarious plot to artificially raise the price of its Lum Coin token, which was advertised as a stablecoin.

On April 20, a New York District Court Judge ruled against Hydrogen Technology Corporation and its former CEO Michael Ross Kane in a case brought by the Securities and Exchange Commission (SEC) and ordered them to pay $2.8 million in remedies and civil penalties.

The amount includes more than $1.5 million in “disgorged” gains, which are rewards for unlawful activities, and more than $1 million in fines. The CEO of Hydrogen, Michael Kane, also agreed to pay a $260,000 personal fine. The balance consists of interest accrued prior to judgment.

LUMINAR Technologies Accused 

In September 2022, the SEC filed a lawsuit alleging that Kane had devised a scheme to use market maker Moonwalkers Trading Limited to control the volume and price of Hydrogen’s ERC-20 token Hydro (HYDRO).

The SEC claimed that Kane and Moonwalkers CEO Tyler Ostern conspired “to create the false appearance of robust market activity” following the distribution of Hydrogen’s Hydro tokens through airdrops, bounty programs, and direct-to-market sales in 2018.

Wash trading, which is the practice of buying and selling the same asset to provide the illusion of trading activity, and spoofing, which is the practice of placing phony buy or sell orders to manipulate the market price, are two of the strategies that the SEC claims were used. In a cryptocurrency lawsuit, the SEC was awarded $2.8 million after alleging that Luminar had misled investors about the stability and value of the Loom Coin token.

According to allegations, Luminar participated in a number of dishonest practices to artificially raise the price of its token and create the false appearance of market demand, according to Stephanie Avakian, director of the SEC Enforcement Division. 

The SEC will continue to punish individuals responsible who attempt to manipulate the market for their own gain, as demonstrated by this case.

Regulatory Authorities Succeed In Stopping Illicit Activity

The parameters of the settlement are currently in place, according to the last information that is known about Hydrogen and Kane. They are unable to further refute the SEC’s accusations under these conditions.

Before the Hydro tokens pass the Howey test and receive additional SEC permission, Kane and the company are not allowed to sell any more cryptocurrency. Kane can still buy and sell crypto assets for his own gain because he is still allowed to engage in the larger crypto market.

The regulatory agencies’ continued attempts to stop illegal activities in the cryptocurrency industry are demonstrated by this case. All market players can trade in a fair and open atmosphere thanks to the regulation drive.

The crypto business, however, is still opposing the SEC more and more. Web3 finance company Paradigm recently voiced reservations about the Commission’s approach to regulating cryptocurrencies.



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