The SEC has halted trading of shares of UBI Blockchain in part due to “unexplained market activity” stretching back a few months.
The company joins Crypto Co. and several other companies that have been flagged by the SEC as having serious questions about the truth of their financial statements.
UBI Blockchain is described by Bloomberg as “designing a suite of modular, self-contained, automated, and climate controlled units for distributed production of energy.”
The company was previously known as JA Energy, but changed its name in 2016. Following the name change (in a way that bears similarity to the recent activity of the Long Blockchain company), the company saw its market value soar to $800 million. This is strange considering the company has never earned any revenue.
According to MarketWatch, the price of the company’s stock has risen over 2,000% in the last 12 months.
The SEC said it was suspending trading of the company’s shares because
“(i) Questions of the accuracy of assertions…regarding the company’s business operations; and (ii) concerns about recent, unusual and unexplained market activity in the company’s Class A common stock since at least November 2017.”
Last week, SEC chairman Jay Clayton repeated the warnings he had issued in December 2017 about the risks cryptocurrencies and ICOs offer investors.
The reason for the suspension of UBI Blockchain is very similar to that of Crypto Co. The company was suspended in December 2017 after its shares rose 2,700% in a single month. Although the suspension subsequently ended on January 3, the stock is now trading at 70% below its previous high.
UBI Blockchain’s CEO Tony Liu said that the SEC’s decision was a reflection of the recent “frenzy” of buying stock related to bitcoin and cryptocurrency:
“We believe the general public is confusing our Blockchain technology with Bitcoin companies [even though we have been] involved in Blockchain technology for well over two years before the Bitcoin buying frenzy took place and we plan to be in business for years after the Bitcoin buying anomaly ends.”