The SEC has been in the headlines recently owing to its regulation and jurisdiction over the crypto sector. The US SEC has charged Hydrogen Technology Corporation for the manipulation of crypto asset securities.
The US Securities and Exchange Commission has charged The Hydrogen Technology Corporation for manipulating crypto asset securities. Hydrogen is a Web3 and financial technology company that has its own native cryptocurrency, Hydro.
The SEC claims that Hydrogen profited over $2 million by manipulating the trading volume and pricing of Hydro. The SEC is also accusing Michael Ross Kane, the former CEO of Hydrogen. The Commission has also named Tyler Ostern, the CEO of Market making business Moonwalkers, as an accomplice in the fraud.
According to the SEC, the defendants were involved in selling unregistered crypto asset securities.
SEC Stance Against Crypto
The SEC has been in the headlines recently owing to its regulation and jurisdiction over the crypto sector. The SEC is taking a strong stance against selling unregistered crypto tokens, which it claims are securities. According to SEC chief Gary Gensler, he feels confident in referring to Bitcoin as a commodity. Other tokens, including Ethereum, may be subject to SEC regulation.
The SEC argues that Hydrogen distributed the token in a variety of methods. It then collaborated with Moonwalkers, a South African market maker outfit, to influence the token's pricing. Furthermore, the SEC contends that the method of token distribution is unlawful.
According to the commission, Hydrogen distributed tokens through an airdrop, bounty programs, staff bonuses, and direct sales on cryptocurrency trading websites.
SEC Suffers Massive Backlash
The crypto community has criticized the SEC for enforcing regulations. Furthermore, analysts assert that the SEC is purposefully unclear in the discussion over the classification of securities vs commodities.
The Blockchain Association's head of policy, Jake Chervinsky, believes that this is another example of the commission's overreach. He says that the SEC may be asserting that airdrops fit the Howey Test standards.
However, Chervinsky reveals that this move cannot be used to evaluate the SEC's theory on airdrops.
COINGABBAR VIEWS: There has been a long debate in the United States going on over crypto as a security. The SEC recently clarified its stance on bringing digital assets, particularly cryptocurrencies marketed with the promise of future returns, under securities regulations.
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