Bitcoin dips US$2,000 after US regulators halt share trading in The Crypto

The US Securities and Exchange Commission temporarily suspends trade in The Crypto Co on concerns about ‘potential stock manipulation’ after shares rise more than 17,000pc in three months

PUBLISHED : Wednesday, 20 December, 2017, 1:20pm
UPDATED : Wednesday, 20 December, 2017, 10:36pm

Bitcoin prices briefly plunged US$2,000 within one hour to below US$16,000 on Wednesday, before paring losses by late afternoon, after the US stock regulator suspended share trading of a cryptocurrency company on concerns about potential stock manipulation.

Bitcoin plummeted from US$17,656 to US$15,577 between 7.45am to 8.45am Hong Kong time, before paring losses later in the day, according to the price index on CoinDesk, a specialist virtual currency news site that tracks prices from exchanges such as Bitstamp, Coinbase and Bitfinex.

By 6pm, the price index was quoted at US$16,946.41, down 3.8 per cent from the previous close.

Bitcoin futures also saw wild swings early in the day.

The CME Group bitcoin futures expiring in January briefly fell to a low of US$16,435, down US$1,310 from the opening level. The contract was recently quoted at US$17,440.

Cboe bitcoin futures that expire in January dropped to as low as US$15,660, before clawing back some losses to trade at US$17,300.

The volatile movements came after the US Securities and Exchange Commission (SEC) on Tuesday halted trading of shares in The Crypto Company until January 3.

Shares of The Crypto have leapt more than 17,000 per cent in the past three months, bolstering its market value to more than US$11 billion.

Before suspension, the stock traded at US$575, versus its comparatively minuscule US$3.3 level in late September.

The SEC cited concerns about “potentially manipulative transactions in the company’s stock in November 2017”.

The regulator was also worried 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”.

Before the SEC action, the company had just announced a stock split of 10-for-1, which would increase the number of total shares and lower the stock price, as the company wanted to “see orderly market activity” and considered the stock split a “responsible thing”.

The Crypto offers a diversified portfolio of digital assets, technologies, and consulting services to blockchain entrepreneurs, businesses and governments who want to explore the use of blockchain technologies, according to the company’s website.