- The top US securities regulator halted trading of The Crypto Currency it said late Monday.
- An Australian man, James Gilbert, is one of the largest shareholders in the company.
- The agency is concerned with the accuracy of statements produced by the company and has frozen shares until January 3.
The US Securities and Exchange Commission has temporarily suspended trading of securities of The Crypto Company, a California-based firm whose shares have skyrocketed more than 17,000% since it first began trading in September.
The suspension, which lasts until January 3, is due to “concerns regarding 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,” the agency said in a press release.
“Questions have also arisen concerning potentially manipulative transactions in the company’s stock in November 2017.”
The company has pushed back against the SEC’s allegations.
“We are fully reporting and get halted,” CEO Mike Poutre told Business Insider Tuesday morning. “SEC is sending the wrong message. We are working with counsel and will handle things appropriately.”
Shares of the company – which trade on the over-the-counter market – began trading on September 27 at a price of $US3.30 per share. By December 11, they had exploded to as high as $US642 per share, according to data from Bloomberg. The company subsequently announced a 10-for-1 stock split.
The meteoric rise in the company’s stock price was based on the value of 7,062 shares which changed hands in over-the-counter trading in early December — just a fractional 0.04% of the 19.6 million shares outstanding.
In the wake of the share price surge, Gilbert’s wealth on paper — based on the size of his stake in the company — rose to over $US1 billion.
The Crypto Company brought in $US487,692 of revenue in the third of quarter of 2017, it said in a November press release. Coupled with operating expenses of $US1.68 million, the company reported a net loss of $US1.51 million, or $US0.08 per share.
The company touts itself as “one of the first publicly traded technology companies in the digital currencies and blockchain sector, offers a portfolio of digital assets, technologies, and consulting services to the blockchain and cryptocurrency markets.”
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