SEC suspends trading of 3 companies after they said they invest in cryptocurrency and blockchain.
On February, 16 the Securities and Exchange Commission of the United States (SEC) announced trading suspension of three companies after checking they made announcement about the acquisition of cryptocurrency and assets associated with blockchain technology.
Among the offenders are Cherubim Investments, Inc. (CHIT), PDX Partners, Inc. (PDXP) and Victura Construction Group, Inc. (VICT). The suspension will lasts until March 2, 2018.
The suspension will allow the SEC to look into claims made by these companies. They have all announced plans to buy cryptocurrency and blockchain assets.
Victura Construction and PDX Partners issued press releases on January 4. Cherubim Interests issued a similar press release on January 3. All these companies are managed by CEO Patrick Johnson, former NFL journeyman wide receiver.
Companies made investments for sums that exceed any estimated market cap or gross profit of the companies.
“The SEC’s trading suspension orders state that recent press releases issued by CHIT, PDXP and VICT claimed that the companies acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology, among other things. According to the SEC order regarding CHIT, it also announced the execution of a financing commitment to launch an initial coin offering.” stated in SEC release.
SEC also mentioned additional reasons for the suspension of trading. So, in the case of Cherubim, this decision was also affected by late submission of annual and quarterly reports.
The statement notes that in August the SEC warned investors that they should be cautious regarding companies that had announced the ICO in an attempt to influence the price of their shares.
It is worth noting that the number of different cryptocurrency and blockchain announces of public companies continues to grow. One of the most notable example was the announcement of Kodak.
Earlier, in January, Jay Clayton, the chairman of the SEC, said that they “was looking closely at the disclosures of public companies that shift their business models to capitalise on the perceived promise of distributed-ledger technology.”
Nowadays, the cryptocurrency industry is experiencing not only exponential growth, but also meet first hidden rocks . So, first of all it is important for consumers to think about protecting their own interests and finances.