SEC Halts Trading In 3 Companies Over Crypto, Blockchain Claims

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The SEC has suspended trading in three over-the-counter cryptocurrency and blockchain companies, the agency said Friday, amid widening concerns among regulators about security and fraud, and the motives of so-called " blockchain pretenders ."

[ibd-display-video id=3148190 width=50 float=left autostart=true] The three companies, which the SEC characterized as "claiming involvement in cryptocurrency and blockchain technology," are Cherubim Interests, PDX Partners and Victura Construction Group. In a statement, the agency said it had "questions regarding the nature of the companies' business operations and the value of their assets, including in press releases issued beginning in early January 2018."

The SEC also said that recent press releases from those companies claimed that they "acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology among other things."

The agency added that it had stopped trading in Cherubim because of its "delinquency" in filing quarterly and yearly reports. The SEC also said that Cherubim had announced execution of a "financing commitment to launch an initial coin offering."

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The SEC over the past several months has stepped up its scrutiny of the blockchain and cryptocurrency space, suspending trading or halting initial coin offerings of other companies.

The regulator has said it was " looking closely " at disclosures of public companies that have abruptly shifted their focus to blockchain, the distributed ledger technology behind Bitcoin transactions. Chairman Jay Clayton has advised caution over companies that have started to "dabble in blockchain activities" and immediately offered shares after changing their name to "something like 'Blockchain-R-Us.'"

Even amid the SEC's concerns, many remain optimistic about blockchain's technological potential.

Jerry Cuomo, IBM 's ( IBM ) vice president of blockchain technologies, recommended that lawmakers "Carefully evaluate policies established regarding cryptocurrencies to ensure that there will not be unintended consequences that stymie the innovation and development surrounding blockchain."

Among blockchain stocks, Long Blockchain ( LBCC ), until recently known as the beverage company Long Island Iced Tea, retreated 3.9% in the stock market today . Overstock.com ( OSTK ), which is shifting from an e-commerce company to one that is focused on blockchain-related activities, slid 1.5%.

Riot Blockchain ( RIOT ), which used to be a biotech company, crashed 27%. CNBC reported on Riot Blockchain's murky transition and key players Friday.

Bitcoin itself was little changed, holding just above $10,000 after retaking that level on Thursday.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: IBM , LBCC , OSTK , RIOT

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