On December 19, 2017, the Securities and Exchange Commission (SEC) suspended the trading of The Crypto Company. The SEC cited concerns about both the adequacy and accuracy of information regarding compensation paid out for the promotion of the firm and possible insider sales plans.
The Crypto Company markets itself as an establishment offering investors portfolios of technologies, consulting services, and digital assets with an emphasis on blockchain and cryptocurrency markets. It said it had plans for rolling out a full-scale and high-frequency trading floor for cryptocurrency.
The Crypto Company is listed as CRCW, and their shares surged roughly 150% in the five days previous to writing this, and that was after an 1,800% gain over the last month, following 17,000% over three months. Investors and traders alike have bid up prices on bitcoin, or XBT, ever higher.
The moves from the SEC came quickly after The Crypto Company signaled its intentions for a 10-1 stock split. It was hoped that would lower the price, making it far more affordable for an average investor.
Prior to the SEC suspension of trading, shares had actually surged to almost $600. Incorporating a 10-1 split would have eventually boosted the total number of shares by a multiple of ten, theoretically lowering the share price to $57.50. Still, the overall value of the business itself would have gone unchanged.
Mike Poutre is the CEO of The Crypto Company. He released a statement about the possible split the company was hoping for, with aspirations of orderly market activity for its stock, thinking that such a split would be a responsible and sensible move.
He went on to note that a lot of blue-chip corporations have previously done stock splits in order to keep their share prices within the range of accessibility of mom and pop investors. Notable examples include Apple, or AAPL, and MasterCard, or MA.
Poutre also talked about the relative sense of euphoria that seems to revolve around bitcoin, adding that he’d prefer people pay their attention to the company they were building rather than the hype around a particular stock or even the larger cryptocurrency world.
The Crypto Company itself wasn’t immediately available for any official comment regarding the action from the SEC.
Having said all that, the SEC has recently taken numerous steps in an attempt at cracking down on possible scams or frauds surrounding the realm of bitcoin and alternative digital currencies, especially with initial coin offerings, also called ICOs. When an ICO happens, a business sells its investors digital tokens or currency rather than stock shares.