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SEC Suspends Trading for Three Public Companies after Blockchain Announcement

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  • Patrick Thompson
    ⭐ Features

    The SEC has suspended trading for three public companies that have made Blockchain related announcements.

SEC Suspends Trading for Three Public Companies after Blockchain Announcement
Cover image via u.today

The SEC has suspended the trading of three companies that trade on the OTC Markets Group (OTCMKTS). Cherubim Interests, Inc. (CHIT), PDX Partners, Inc. (PDXP), and Victura Construction Group, Inc. (VICT) have had the trading of their shares suspended from 9:30 a.m. EST on Feb. 16, 2018, to 11:59 p.m. EST on March 2, 2018.

What prompted the SEC to halt the trading of these companies was a recent press release by all three stating that they had acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and Blockchain technology. To add insult to injury, CHIT had not been filing annual and quarterly reports with the SEC. What also troubled the SEC was CHIT’s announcement of a financial commitment they made to launch an ICO. The actions of the three companies have led the SEC to question the nature of these companies’ business operations and the value of their assets.

Patrick Johnson, the CEO of all three of the companies said, “We haven’t made any false claims about anything that we have put out.”

But just because Mr. Johnson alleges that his companies have not put out any false claims does not mean that it is true. Recently, there has been a series of troubling Blockchain related claims being made by public companies. Companies that are nearly underwater have been making public announcements that they will be incorporating Blockchain technologies into their business operations. When companies make announcements of this nature, they usually see their stock prices increase about 200 percent on average. In one case, Long Island Iced Tea Corp. changed their name to Long Blockchain and saw their stock rise 300 percent. When Eastman Kodak announced that they would be creating a digital asset called the Kodak Coin their stock rose more than 200 percent.

However, the practice of struggling companies changing their name and business model to incorporate the word “Blockchain” has the SEC worried that companies are using cryptocurrency and Blockchain technologies to capitalize on the gains that come with the trends. Jay Clayton, the chairman of the SEC said, “Fraudsters often try to use the lure of new and emerging technologies to convince potential victims to invest their money in scams.”

It would not be surprising if algorithm trading related to the words cryptocurrency and Blockchain is taking place. If developers create an algorithm that is keen on cryptocurrency and Blockchain related business, an investor may strike gold by putting their money into a company that could one day be as big as Google due to their blockchain innovations. Seeing companies take advantage of emerging technologies is nothing we haven’t seen in the past. During the dot-com bubble, companies like Pets.com turned out to be worthless despite the “dot com” in their name. Considering that Mr.Johnson claims all three statements are in line with events that have actually taken place, it will be interesting to see what happens to his companies after further investigation.

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About the author

Patrick Thompson is a freelance writer who has written for several publications in the past about a vast range of topics.  Thompson is an Economics & Philosophy major at Rutgers University, where he is currently completing his senior year; upon graduating, Thompson plans to go to law school. Thompson is currently the

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Binance CEO Changpeng Zhao Denies Opening Office in Beijing

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  • Alex Dovbnya
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    No, Binance doesn't plan to open a Beijing office despite China warming up to crypto

Binance CEO Changpeng Zhao Denies Opening Office in Beijing
Cover image via yotube.com

During a recent Bloomberg interview, Binance CEO Changpeng Zhao said that the Malta-based exchange didn't have plans to open an office in Beijing. 

"We don't have an office in Beijing. That's a rumor. That's not true."    

When it comes to their strategy in China, CZ says that they will focus on research and development while helping "wherever they can."

"Our strategy is very simple. I think we want to follow the recommendations very closely and we want to promote the Blockchain technology research and development."    

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Binance's homecoming

On Oct. 31, Coindesk reported that Binance was opening a new office in the Chinese capital, citing two anonymous sources. However, Binance didn't confirm this information. 

This came after Binance launched peer-to-peer trading against the Chinese yuan (CNY) on Oct. 9, which signaled that the country might be finally ready for homecoming after leaving China after that crypto clampdown that took place in Sept. 2017.

Back in August 2019, Binance barred its citizens from using more than 100 foreign exchanges, including Binance. 

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Throwing weight behind blockchain

As reported by U.Today, Chinese President Xi Jinping endorsed blockchain, the technology behind the vast majority of cryptocurrencies, which sparked a major crypto rally. 

Following President Xi's comments, the People’s Daily, the mouthpiece of the Communist Party of China, called blockchain a "breaking point" while the country's military newspaper suggested that Chinese soldiers could be rewarded with crypto tokens. 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with an extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets.

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