SEC Suspends Trading In 3 Companies Due To ‘Questions’ Around Cryptocurrency Ties

The Securities and Exchange Commission[1] (SEC) published[2] a report Thursday, Feb. 15 explaining the temporary suspension of trading in three companies that had made statements about acquiring cryptocurrency[3] and “Blockchain technology-related assets”.

All three companies, Cherubim Interests[4] (CHIT), PDX Partners[5] (PDXP), and Victura Construction Group[6] (VICT) have been suspended starting Feb. 16 for two weeks for investor protection purposes. The SEC trading suspension orders state that all three companies issued press releases that claim that:

“[T]he companies acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology, among other things. According to the SEC order regarding CHIT, it also announced the execution of a financing commitment to launch an initial coin offering [ICO],”

The SEC orders also state “there are questions regarding the nature of the companies’ business operations and the value of their assets”.

In late August, 2017, the SEC issued a warning to investors[7] regarding ICOs and the potential for scams, including reasons it might suspend trading of a company “to protect investors and the public interest”. On Jan. 22, 2018 SEC Chairman Jay Clayton warned[8] that companies that shift their business models “on the promise” of Blockchain technology will face closer scrutiny from regulators.