SEC halts trading in bitcoin-based company

The Securities and Exchange Commission (SEC) has suspended trading on shares of The Crypto Company, which deals in digital currencies, after its stock surged by roughly 2,700 percent in the past month.

Regulators said their decision was based on the “accuracy and adequacy of information in the marketplace” about The Crypto Company. In particular they raised concerns about “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.”

“Questions have also arisen concerning potentially manipulative transactions in the company’s stock in November 2017,” the SEC said in announcing the suspension.

The company’s shares were trading at roughly $575 earlier this week.

{mosads}The SEC’s action against The Crypto Company comes amid an enormous rally in cryptocurrencies. In recent weeks, the highest market capitalization digital currencies like bitcoin and Ethereum have exploded in value as investors rush in.

According to the small firm’s website, it consults on matters regarding cryptocurrency and develops technology for the “future of blockchain and cryptocurrencies” and manages a portfolio of “digital assets.” Its investor relations page currently directs visitors to a 404 error page.

“There are a lot of companies taking advantage of the euphoria associated with this space, and we do not want be associated with them,” its CEO Mike Poutre said in a release last week announcing a 10-for-1 stock split. “We want people to pay attention to the business we are building, not the hype of a stock or the cryptocurrency world.”

The boom in digital currencies has regulators taking a second look at the market.

The SEC has only intervened in obvious cases of abuse or fraud, but last week cautioned investors to be wary of such assets.