The U.S. Securities and Exchange Commission last week suspended trading in three companies after they announced the acquisition of cryptocurrency and blockchain-based assets.
The three companies are Cherubim Interests Inc. (CHIT), PDX Partners Inc. (PDXP), and Victura Construction Group Inc. (VICT). In its order, the SEC has raised questions about the nature of the companies’ business operations and the value of their assets, included in press releases issued beginning in early January 2018.
According to the SEC’s trading suspension orders, the recent press releases issued by the three companies claimed that they acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology among other things.
The SEC order regarding CHIT stated that the company also announced the execution of a financing commitment to launch an initial coin offering (ICO). In addition, the agency suspended trading in the securities of CHIT because of its delinquency in filing annual and quarterly reports, the SEC said in its media release.
“This is a reminder that investors should give heightened scrutiny to penny stock companies that have switched their focus to the latest business trend, such as cryptocurrency, blockchain technology, or initial coin offerings,” said Michele Wein Layne, Director of the Los Angeles Regional Office.
