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Sports Bra Maker-Turned Digital Currency Firm Sees SEC Suspend Trading




NEWS: Sports Bra Maker-Turned Digital Currency Firm Sees SEC Suspend Trading [New Foreign News] » Naijacrawl
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The Securities and Exchange Commission has suspended stock trading in The Crypto Co.

(CRCW) , a sports bra-turned digital-currency company whose share price has surged 57-fold since September, as the U.S. regulator alleged doubts about the accuracy and adequacy of its supporting disclosures to investors.

The two-week suspension in Malibu, California-based Crypto's shares took effect at 9:30 New York time Tuesday, according to an order posted on the agency's website. The stock trades in over-the-counter markets, with a price quoted on the platform OTC Link, the SEC said. 

Crypto went public earlier this year after a reverse takeover of sports-bra maker CROE Inc. and has raised at least $10 million through stock sales, company regulatory filings show. 

The SEC had concerns about the accuracy and adequacy of information on "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," according to the order. "The commission is of the opinion that the public interest and the protection of investors require a suspension of trading."

Bitcoin's almost 20-fold rise this year to about $19,000 has attracted flocks of startups, opportunists, miners and traders looking to cash in on the frenzy. Although this month's debut of bitcoin futures trading on the Chicago-based exchanges Cboe Global Markets Inc. (CBOE - Get Report) and CME Group Inc. (CME - Get Report) has brought a veneer of legitimacy to the nascent market, regulators are wary of the possibility that ordinary investors might become victims of fraud or manipulation.

The order against Crypto comes just a week after another California-based company, Munchee Inc., halted a so-called initial coin offering after being accused by the SEC of offering unregistered securities. In an ICO, investors provide cash to a company in exchange for digital tokens; the SEC has said such tokens can be considered securities under certain circumstances -- and thus subject to regulatory oversight.

In a Dec. 11 statement, SEC Chair Jay Clayton warned that social media platforms have been "abuzz" over cryptocurrencies, featuring "takes of fortunes made and dreamed to be made."

"A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation," Clayton said in the statement.

Jamie Dimon, CEO of JPMorgan Chase & Co. (JPM - Get Report)  , the biggest U.S. bank, has described bitcoin as a "fraud" and "worse than tulip bulbs."

According to Crypto's regulatory filings, the company invests in technologies and tokens "in a manner that diversifies exposure to the growing class of digital assets." Crypto also advises on trading of digital assets and proprietary software.  

The CEO is Michael Poutre, 46, filings show. In the past decade, he has run a hedge fund, headed a mobile-app search firm, served as CEO of a jewelry designer, consulted for utilities and worked at a company that makes films of peoples' memories for their descendants, according to his LinkedIn profile.

A call to a phone number listed in Cryto's regulatory filings went unanswered, as did an e-mail sent through the company's website. Poutre could not be reached at phone numbers listed in a public-records database.

According to the SEC's order, questions have also arisen "concerning potentially manipulative transactions in the company's stock in November 2017."

Crypto's stock price climbed to $575 on Monday, up from just $10 as recently as Sept. 29, FactSet data show. No trades or price updates had been posted on Tuesday as of 2 p.m. New York time.

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