SEC Suspends Trading in Blockchain Firm With No Revenues and No Product
Financial regulators around the world seem to finally notice that some companies are trying to capitalize on the insatiable appetite for everything crypto by claiming a link to blockchain. Trading in the stocks of one such alleged company has now been stopped by the SEC.
Wait a SEC
The US Securities and Exchange Commission (SEC) has announced the temporary suspension of trading in the securities of UBI Blockchain Internet, Ltd. (OTCMKTS: UBIA), of Hong Kong, China on January 8, 2018. Last we reported two weeks ago it was worth about $1.2 billion after its stock jumped in value about 1,000% in 2017.
The SEC explains it suspended trading in the securities of UBI because of “(i) questions regarding the accuracy of assertions, since at least September 2017, by UBIA in filings with the Commission regarding the company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the company’s Class A common stock since at least November 2017.”
Everything is Blockchain, Nothing is Blockchain
UBI claimed in its SEC filings that it is developing a solution based on blockchain technology “to trace a food or drug product from its original source within the context of the Internet of Things to the final consumer.” However, it is not clear at all that the company had any ability to actually try and deliver on this promise.
Prior to changing its name to to UBI Blockchain Internet in November 2016, the company was supposed to be designing a suite of modular, self-contained, automated, and climate controlled units for distributed production of energy. It also does not have any significant operations and just 18 employees, according to records at Yahoo Finance.
What might have triggered the SEC to act, beyond the negative press coverage, is UBI management’s plans to sell an extra 72.3 million shares owned by its top executives. Could this serve as a sign for other “blockchain” named companies to not try to sell stocks when they are at their peak price based on hype alone?
Was the SEC right to stop trading on UBI? Tell us what you think in the comments section below.
Images courtesy of Shutterstock.
The post SEC Suspends Trading in Blockchain Firm With No Revenues and No Product appeared first on Bitcoin News.
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