US SEC suspends trading in crypto firm after spectacular rally in its shares
US securities regulators on Tuesday temporarily suspended trading in the shares of Crypto Company, a small firm that saw its stock rise more than 2,700 per cent this month after signing a deal to buy a cryptocurrency data platform.
The US Securities and Exchange Commission cited concerns about the “accuracy and adequacy of information” about the Malibu, California-based company available to investors. The suspension will remain in place until January 3.
“Questions have also arisen concerning potentially manipulative transactions in the company’s stock in November 2017,” the SEC said.
Crypto Co, which said it provides a “portfolio of digital assets, technologies, and consulting services to the blockchain and cryptocurrency markets,” changed its name from Croe Inc to Crypto Company in October.
In late November, the over-the-counter-traded company announced a deal to buy a majority stake in Coin Tracking e.K., a German cryptocurrency data platform.
Investors have been pouring millions of dollars into companies with “crypto” or “blockchain” in their names, reminiscent of the late 1990s, when firms with “.com” in their names saw their shares surge.
Bitcoin, the world’s best known cryptocurrency, has risen more than 1,800 per cent this year as mainstream exchange companies introduced futures trading in the virtual currency.
Crypto Co’s stock hit US$575 on Monday, rising from US$3.50 in late September.
The company’s market value surpassed US$11 billion, almost equalling that of home appliances maker Whirlpool Corp or railroad Kansas City Southern.
