The Securities and Exchange Commission has temporarily suspended trading for cryto currency market operator Bitcoin Generation while it looks into concerns about information on the marketplace on which investors are relying.
The SEC scheduled a suspension lasting through May 10 for the trading of securities for the Oklahoma-based company, which identifies itself as a miner, trader, and developer of blockchain-based digital assets. The company trades Bitcoin, ethereum, litecoin and other digital currencies.
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The SEC says it has concerns about the “accuracy and adequacy” of information in the marketplace regarding a number of aspects of Bitcoin Generation, including public statements by the company regarding the viability and valuation of a bond that the company says it acquired from an entity based in the United Kingdom. The SEC is also concerned about the amount of the company’s outstanding stock, stock promotional activity related to the company and its impact on the market, and the accuracy and adequacy of current public information regarding Bitcoin Generation’s financial condition.
Bitcoin Generation did not respond to a request for comment.
“The Commission cautions broker-dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company,” the SEC said in issuing the temporary suspension order.
Regulation over digital currencies is still a gray area. Bitcoin Generation is not an SEC registrant, so it does not submit financial statements to the SEC. Bitcoin Generation says on its website it does not issue digital currency, but provides a marketplace where “approved users” can buy, sell, and trade digital currencies.
SEC Chairman Jay Clayton has said he’s optimistic about the potential for digital currencies to facilitate capital formation, but he’s also committed to bringing securities laws to bear on the marketplace. The SEC is hosting a fintech forum in late May to explore distributed ledger technology, which includes blockchain, and digital assets.
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