The U.S. Securities and Exchange Commission has halted trading in three companies that claimed acquisitions of assets tied to cryptocurrency and blockchain technologies, saying the agency had questions about their business operations and the value of their assets.
Cherubim Interests Inc., PDX Partners Inc. and Victura Construction Group Inc. issued similar press releases saying they acquired the assets from a subsidiary of a private-equity investor, the SEC said in a statement Friday. Cherubim additionally announced plans to launch an initial coin offering, the SEC said. In announcing the trading suspensions, the agency repeated a warning to investors about companies that may be seeking short-term stock boosts by touting involvement with blockchain technology.
“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,” Michele Wein Layne, director of the SEC’s Los Angeles office, said in the agency’s statement. The SEC can suspend trading for 10 days and ban brokers from activity in a stock until its reporting requirements are met.
“We did receive confirmation that they suspended trading this morning and that it will continue until March 2,” Patrick Johnson, chief executive officer of all three companies, said in a telephone interview. “We haven’t made any false claims about anything that we have put out.”