U.S. Regulator Halts Trading in Three Firms for ‎Cryptocurrency Involvement

SEC told ‎the first blockchain ETFs in the last minute to tweak ‎their names and erase ‎the word ‘blockchain’‎

The U.S. Securities and Exchange Commission on Friday ‎suspended trading in shares of three companies due to questions about ‎their recent PRs which advertised the buyout of cryptocurrency and ‎blockchain-related assets.‎

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The financial regulator cited concerns regarding the accuracy and ‎adequacy of information about acquiring top rated assets from a ‎cryptocurrency investor, among other things. Perhaps that piqued the ‎regulator’s concern, in particular after on of the suspended firms also announced plans to arrange an initial coin offering (ICO).

The US top regulator warned investors against throwing money into the ‎digial crowdsale because the organizers intended to launch a cryptocurrency-‎based ‎investment scheme without even attempting to follow US ‎securities laws.‎

The Commission temporarily suspended trading in the ‎securities of Cherubim Interests Inc. (CHIT), PDX Partners Inc. (PDXP), and Victura ‎Construction Group Inc.

The SEC’s decision comes as interest in the technology that underpins bitcoin and other ‎virtual currencies has emerged as a powerful investing theme. Several firms saw its stocks ‎price almost triple in a day just for adding the word ‘blockchain’ to their brand names or announcing ‎plans to launch technology-based products.‎

Ironically, in January, the SEC told ‎the first blockchain ETFs in the last minute to tweak their names and erase ‎the word ‘blockchain’.

The regulator insisted on the name changes as investors ‎seem ‎desperate for any kind of blockchain exposure, to ‎the point where ‎many startups that put the word ‎blockchain, or other cryptocurrency terms, ‎into their name ‎have seen their share prices soar.‎

Analysts compared the trend ‎with what happened during ‎the tech bubble, where many the technology ‎firms got a ‎strong boost just for adding ‘dot-com’ to their brand ‎name.‎

Michele Wein Layne, ‎Director of SEC’s Los Angeles Regional Office, commented: ‎“This is a reminder that investors should give heightened scrutiny to penny stock ‎companies that have switched their focus to the latest business trend, such as ‎cryptocurrency, blockchain technology, or initial coin offerings.” ‎

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