SEC halted trading on 3 companies involved in cryptocurrency

On behalf of Law Office of Clifford J. Hunt, P.A. posted in General on Monday, April 2, 2018.

In mid February, the Securities and Exchange Commission (SEC) suspended trading for three companies in relation to cryptocurrency and blockchain technology. The SEC initiated the suspension after questions about the companies’ operations and asset valuation arose.

Trading suspension

THE SEC suspended trading for Cherubim Interests Inc., PDX Partners Inc. and Victura Construction Group Inc. after the companies acquired AAA-rated assets from a private equity investor subsidiary. Assets from the subsidiary included cryptocurrency and blockchain technology. The SEC’s orders concerning the suspension questioned the nature of the companies’ business operations and asset valuation. One of the companies, Cherubim Interests Inc., also had a history of delinquent quarterly and annual report filing.

The ICO market and digital assets

Entrepreneurs and businesses are increasingly utilizing a modern mode of raising capital: initial coin offerings (ICO). ICO investment transactions vary, but often a purchaser or investor buys virtual coins to fund the development of the new business. The coins may allow the purchaser to access the new business platform or share in returns as the project matures. ICO transactions typically utilize blockchain technologies to process and track the transactions.

Latest trends and stock inflation

The SEC warns investors to be alert for public announcements from companies about cryptocurrency and ICO. The announcements can be used to inflate stock prices and gain investors. Understanding the terminology and basic concepts of virtual assets is essential to making sound investment decisions. Before committing to an ICO ask questions and research the seller’s background. Guaranteed returns, unsolicited offers and urgent pressure to buy are warning signs of investment fraud.