The Securities and Exchange Commission has cracked down again on fishy cryptocurrency moves.
This time, the regulatory body has suspended trading for three companies amid questions surrounding similar statements all three made about the acquisition of cryptocurrency and blockchain-related assets, the SEC said in a Feb. 16 statement.
Cherubim Interests Inc. (CHIT) , PDX Partners Inc. (PDXP) and Victura Construction Group Inc. (VICT) recently each released press statements claiming they acquired AAA-rated assets from a subsidiary of unnamed private-equity investors in cryptocurrency and blockchain technology. Cherubim also reportedly announced plans to execute a financing committee to launch an initial coin offering, the SEC said.
The SEC said it has questions regarding the "nature of the companies' business operations and the value of their assets." Cherubim was also reprimanded for delinquency in filing annual and quarterly reports.
The SEC warned investors in August 2017 to "be on alert for companies that may publicly announce ICO or coin/token related events to affect the price of the company's common stock."
"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," said L.A. regional SEC office director Michele Wein Layne in a statement.
The SEC can suspend trading for issuers for 10 days and can usually prohibit investor solicitation following that period for as long as it takes the companies in question to meet certain reporting requirements.
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