On September 28, 2022, the Securities and Exchange Commission announced charges against The Hydrogen Technology Corporation, its former CEO, Michael Ross Kane, and Tyler Ostern, the CEO of Moonwalkers Trading Limited, a self-described "market making" firm, for their roles in effectuating the unregistered offers and sales of crypto asset securities called "Hydro" and for perpetrating a scheme to manipulate the trading volume and price of those securities, which yielded more than $2 million for Hydrogen.

The SEC's complaint, filed in federal district court in Manhattan, alleges that starting in January 2018, Kane and Hydrogen, a New York-based financial technology company, created its Hydro token and then publicly distributed the token through various methods:  an "airdrop," which is essentially giving away Hydro to the public; bounty programs, which paid the token to individuals in exchange for promoting it; employee compensation; and direct sales on crypto asset trading platforms. The complaint further alleges that, after distributing the token in those ways, Kane and Hydrogen hired Moonwalkers, a South Africa-based firm, in October 2018, to create the false appearance of robust market activity for Hydro through the use of its customized trading software or "bot" and then selling Hydro into that artificially inflated market for profit on Hydrogen's behalf. Hydrogen allegedly reaped profits of more than $2 million as a result of the defendants' conduct.

The SEC's complaint, which was filed in the Southern District of New York, charges Hydrogen, Kane, and Ostern with violating the registration, antifraud, and market manipulation provisions of Sections 5 and 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder and seeks permanent injunctive relief, conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, and, as to Kane, an officer and director bar. The complaint also charges Hydrogen and Kane with committing violations of the antifraud and market manipulation provisions under Section 20(b) of the Exchange Act, and Ostern with acting as an unregistered broker in violation of Section 15(a) of the Exchange Act.

Without admitting or denying the allegations, Ostern consented to a judgment, which was entered by the court on September 29, 2022, permanently enjoining him from violating these provisions and participating in future securities offerings and ordering him to pay $36,750 in disgorgement and prejudgment interest of $5,118, with civil monetary penalties to be determined at a later date by the court. On October 6, 2022, the SEC issued an order barring Ostern from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, and from participating in any offering of a penny stock.

The SEC's investigation was conducted by Sonia G. Torrico and Kathleen Hitchins, with assistance from John Marino of the Market Abuse Unit, David Crosbie from the Crypto Assets and Cyber Unit, and Olga Cruz-Ortiz of IT Forensics. The case was supervised by Paul Kim, Joseph Sansone, and Carolyn M. Welshhans. The SEC's litigation will be led by Nick Margida and supervised by James Connor. The SEC appreciates the assistance of the Cayman Islands Monetary Authority, the Financial Sector Conduct Authority of South Africa, the Financial Supervisory Authority of Norway, and the Monetary Authority of Singapore.