The U.S. Securities and Exchange Commission temporarily suspended trading Tuesday in shares of The Crypto Company, whose shares have surged more than 2,700 percent this month.
The suspension will last until midnight on Jan. 3, according to a release.
The commission cited concerns about the “accuracy and adequacy of information in the marketplace about, among other things, the compensation paid for promotion of the company, and statements in Commission filings about the plans of the company’s insiders to sell their shares of The Crypto Company’s common stock.”
“Questions have also arisen concerning potentially manipulative transactions in the company’s stock in November 2017,” the release said.
Bitcoin traded 4.6 percent lower near $18,015 on Coinbase, the leading U.S. platform for buying, selling and trading major cryptocurrencies. The digital currency itself has soared 2,000 percent in the last 12 months.
Several other small companies have seen their stock surge dramatically following announcements that tied them to bitcoin or the blockchain technology behind the cryptocurrency.
Financial technology company Longfin grabbed investors attention Monday with a brief two-day surge of more than 2,500 percent after saying it was acquiring Ziddu.com, which says it’s a microlending company based on blockchain. Longfin’s CEO and Chairman Venkat Meenavalli said Monday on CNBC’s “Fast Money” that “this market cap is not justified.”
The SEC has been more active in trying to limit speculative activity related to bitcoin and token sales, also known as initial coin offerings.
SEC Chairman Jay Clayton warned in a lengthy statement earlier this month about the dangers for investing in cryptocurrencies and initial coin offerings.
In August, the SEC temporarily suspended trading in three stocks due to questions about the companies’ claims regarding investments in initial coin offerings or other token-related news. The Commission also published an investor bulletin in July warning investors about the risks of participating in initial coin offerings.
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