The Crypto Co. (OTC:CRCW) has had its trading temporarily suspended by the Securities and Exchange Commission (SEC) due to what the SEC considers to be “potentially manipulative” stock transactions.
The Crypto Co. is a technology company involved with digital currencies and blockchain. Its most recent financials have caused some red flags with the SEC and are among the many ongoing investigations that the SEC is currently conducting for blockchain and cryptocurrency companies alike. The SEC is concerned that increasing popularity of the crypto sector could potentially cause an investment bubble with possible fraud, and the Crypto Co.’s immense stock soar over the course of this month has placed the company on the SEC radar.
The suspension will run from today, Tuesday, December 19, until Wednesday, January 3, 2018. Pre-suspension the Crypto Co. stock was sitting at $575 (to put the stock jump into perspective, on November 30, the stock closed at $20).
The reason behind the SEC suspension is largely due to the concerns that the SEC has about “the accuracy and adequacy of information” it has received about how much money went into promoting the company. The SEC is concerned that the company is attempting to bolster its stock price so that it can later dump all of the stock onto unsuspecting investors.
In addition, the SEC is suspicious of several of the company’s stock transactions, including when it claimed in its filing on December 13 that it had issued 1,150,280 shares of common stock. The stock was sold at $7 a share to what the Crypto Co. claimed were 76 “accredited investors”. This move got the company $7,679,488.
This is a notable move for the SEC because it is the first time that the Commission has formally stepped in and shut down a company’s trading on suspicion of sketchy transactions. Suspicions have arisen due to the fact that the recent average trading level for the Crypto Co.’s stock is measured above what it has normally been within the last few months (the company’s 90-day average is about 800-900).
I’m interested in checking back in with the company in January and seeing what the SEC discovers, and, even more, how those discoveries will impact the Crypto Co.’s stock.
Featured image: Depositphotos – AndreyPopov
