Shares of Blockchain Company that soared 900 percent in 2017 Halted by SEC
It has been confirmed that a company based in Hong Kong has had the trading of its shares suspended by the regulators in the United States, after incorporating the word ‘blockchain’ into its name.
This comes after they leveraged the surge in popularity for blockchain related investments in 2017 and managed share price hikes of over 900 percent. The reason trading was halted was due to the authorities being concerned that the business had misled their investors about their operations.
It was the United States Securities and Exchange Commission that called a halt to trading of the UBI Blockchain Internet Ltd. Shares as a result of what they described as “unusual and unexplained market activity.”
They also have their doubts about how accurate the company’s proclaimed information in their financial statements might be.
This, of course, is a big deal as it misleads investors into thinking the financial status of the company is better than it actually is, which may lead to them investing more money into the company’s shares.
The company had seen its market value close in on $800 million despite the fact that they had never posted any of their revenue figures and having a phone number that is disconnected being filed with the authorities.
The company had planned to utilize blockchain technology in order to allow consumers to be able to track a drug or food product all the way back to where it originally was sourced.
Tony Liu, the CEO of UBI Blockchain, admitted that they understood why the SEC had taken action due to the massive surges in stock buying as a result of the cryptocurrency craze in recent times.
They are also of the belief that the general public has mistaken them for being a bitcoin-related company when in fact it is just the blockchain technology that they are focused on. They had been in business for a couple of years before bitcoin had even taken off.
It was in 2016 that they changed their name from JA Energy to UBI Blockchain, and their share price reached highs of $115 during 2017, having sold for only $0.55 in February 2016.
At the time, this resulted in the company being one of priciest blockchain-related companies on the public market.
As they had their shares being traded over the counter rather than on an exchange that is strictly regulated, they avoided a lot of attention from the authorities until recently. The SEC has announced that the halting of trading will commence January 22, 2018.
This comes after the predominant regulator on Wall Street has been cracking down on cryptocurrency-related companies who have seen massive price rises without necessarily being justified.
There have been many instances of pump and dumps in the crypto community for example that has given the sector somewhat of a bad image at times.
It was in December 2017 that Crypto Co. had the trading of their shares halted as a result of their market value exceeding $11 billion despite the fact that they had only generated a couple hundred thousand dollars in revenue in addition to having zero profit.