Crackdown on crypto: SEC charges two people in illegal blockchain stock sale

03 Jul, 2018
by Will Heasman
News
Crackdown on crypto: SEC charges two people in illegal blockchain stock sale

Two men from Nevada, USA, have agreed to settle in a lawsuit brought by the SEC. The regulatory body accused the men of profiting from illegal sales of Hong Kong-based company, UBI blockchain internet Ltd.

UBI Blockchain is a Hong Kong-based blockchain company focusing on the Internet of Things (IoT). They started trading around a year ago at just 0.55 per stock since then the price has increased significantly, going as high as $115.

The two men received restricted shares in the company back in October and were only allowed to sell them at a fixed price of $3.70, However, they managed to make around $1.4 million by illegally selling shares at much higher prices, ranging from $21 - $48 due to a rally in company stocks.

The SEC stepped in shortly after, halting UBI Blockchain due to “unusual and unexplained market activity”.

“This case is a prime example of why the SEC has warned retail investors to be cautious before buying stock in companies that suddenly claim to have a blockchain business,” said Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit.

According to Bloomberg the men returned all $1.4 million in profits and agreed to pay more than $180,000 in fines, doing so without denying or admitting fault.

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