The Security and Exchange Commission (SEC) has pressed charges against The Hydrogen Technology Corporation and its market makers. The SEC alleges them for concocting unregistered offers and sales of their securities to avoid federal security laws.

SEC claims that this firm and its representatives have been selling their tokens publicly through disguises such as “airdrops”, bounty programs, employee compensation, and direct sales on exchange platforms. Later, they hired a South Africa-based firm, Moonwalkers to fabricate a false report of robust market activity to protect themselves.

This false report had constituted the use of customized trading software or “bot” which then sells to the forcefully inflated Hydro market for profit. According to reports, the firm had collected more than $2 million from this process.

“Companies cannot avoid the federal securities laws by structuring the unregistered offers and sales of their securities as bounties, compensation, or other such methods,” mentioned the Associate Director of the SEC’s Enforcement Division. The SEC has filed a complaint against the firm and individuals involved for a list of punishable offenses including antifraud, violating the registration, market manipulation, and more.

Ostern, the CEO of Moonwalkers Trading Limited, the firm that helped fabricate false market activity reports did not deny or admit to the allegations yet. The CEO has consented to a judgment, which has permanently enjoined him from violating the alleged provisions. He was further forced to participate in future security offerings and has been ordered to pay a fee of around $41,000 with penalties yet to be determined in court at a later date.

According to the SEC complaint, these activities had begun in January 2018 by the firm’s former CEO Michael Ross Kane and Hydrogen. The activities of this firm are now undergoing thorough investigation and the receivable punishment will be decided at a later date.