Date: December 20th, 2017 11:27 AM
Author: fighting pea-brained ape stag film
Update: fraud stock was halted by the S.E.C. yesterday. last traded at 575. peak experience
https://www.ft.com/content/891c4046-e4d8-11e7-97e2-916d4fbac0da
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https://www.ft.com/content/891c4046-e4d8-11e7-97e2-916d4fbac0da
Crypto Company shares suspended by regulators
SEC moved in after fervour for digital currency businesses sent stock soaring
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Chloe Cornish in San Francisco
YESTERDAY 1
US regulators have halted trading in shares of Crypto Company, a penny stock whose value surged more than 2,000 per cent this month thanks to the hype surrounding bitcoin, saying it was concerned over the possibility of market manipulation.
Crypto, a Malibu, California-based business that says it is building a cryptocurrency trading and advisory business, was one of a handful of previously obscure stocks to have drawn attention for wild price moves, as investors hunted for equities that might benefit from the booming interest in digital currency.
In a statement on Tuesday, the Securities and Exchange Commission said it had concerns about the “accuracy and adequacy of information in the marketplace” about payments made for promotion of the company and plans by company insiders to sell shares.
Questions had also arisen, the SEC said, about “potentially manipulative transactions in the company’s stock in November 2017”.
The company said it would be issuing a statement in response to the SEC suspension but declined to comment further. The regulator said its suspension would last until January 3.
Crypto shares are traded over the counter rather than on an official exchange. The price spike briefly gave the company a market capitalisation of $12.6bn and made its chief executive, Michael Poutre, a paper billionaire thanks to his one-fifth stake.
During its wild ride, an investment company run by Mr Poutre sold stock, and the company itself last week raised $7.7m by issuing new shares at $7 apiece — a 97 per cent discount to the quoted market price at the time. It also said it was planning a stock split to try to improve liquidity in its shares.
US regulators have signalled that they are watching developments associated with cryptocurrencies closely. The chairmen of the SEC and the Commodity Futures Trading Commission both cautioned investors last week to tread carefully.
The investor fervour has attracted comparisons to the dotcom mania of two decades ago, and Crypto is not the only company to have enjoyed a share price bump in recent weeks.
LongFin, a trade finance company that went public last Wednesday, rocketed after subsequently announcing the acquisition of its founder’s side project, a company that offers loans in digital currency. From $5 last week, LongFin shares were trading at $71 on Tuesday, giving it a value of more than $6bn.
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At the beginning of November, Crypto shares were trading around $32 before climbing to a $642 high on December 11. They were trading at $575 on Monday before the SEC issued the temporary suspension.
Mr Poutre, a former stockbroker, was suspended for two years by the Financial Industry Regulatory Authority in 2010 over outside business activities. He did not admit any wrongdoing and told Bloomberg that he had tried to have the record expunged after he sued his former employer.
He brought Crypto to market this summer through a reverse takeover of a company that had previously been developing parts for sports bras.
According to company filings, Crypto offers “institutions and individuals direct exposure to the growth of global blockchain developments” through business activities including consulting, investing in cryptocurrencies, and developing “proprietary source code for the management of digital assets”. It said it had made $564m trading cryptocurrency since March.
(http://www.autoadmit.com/thread.php?thread_id=3829728&forum_id=2#34966143)