The SEC halts trading of 3 companies after they said they were diving into crypto

Jay Clayton is sworn in to testify at a Senate Banking, Housing and Urban Affairs Committee hearing on his nomination of to be chairman of the Securities and Exchange Commission (SEC) on Capitol Hill in Washington, U.S. March 23, 2017.

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Jay Clayton is sworn in to testify at a Senate Banking, Housing and Urban Affairs Committee hearing on his nomination of to be chairman of the Securities and Exchange Commission (SEC) on Capitol Hill in Washington, U.S. March 23, 2017.
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REUTERS/Jonathan Ernst

  • SEC has halted trading in three companies that have made cryptocurrency-related announcements.
  • The three companies, which trade in OTC markets, all announced plans to purchase crypto assets.

Count this as another sign that US regulators are paying closer attention to the nascent cryptocurrency world.

The Securities and Exchange Commission on Friday suspended the trading of three companies after they made announcements that they would dive into crypto, according to a memo dated February 15.

The suspension, which lasts until March 2, will allow the SEC to look into claims made by Cherubim Interest, PDX Partners, and Victura Construction. The companies have all announced plans to purchase cryptocurrency-related assets, according to the regulator.

“The SEC’s trading suspension orders state that recent press releases issued by CHIT, PDXP, and VICT claimed that the companies acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency and blockchain technology, among other things,” the memo said.

The agency will also look into Cherubim’s plans for an initial coin offering, a cryptocurrency twist on the initial public offering process. The three companies trade in over-the-counter markets.

The SEC has made it clear that it will closely examine companies that claim to doing business in cryptocurrency. In August, it warned investors about the possibility of companies making crypto announcements to impact their share price.

Jay Clayton, the chairman of the regulator, said in January that the agency “was looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed-ledger technology.”