The Securities and Exchange Commission temporarily suspends trading of the Department of Cryptocurrency QMMM holdings due to potential stock operations that will come just a week after reports of regulatory investigations to certain cryptocurrencies surface.
“The Commission temporarily suspends trading of QMMM securities due to potential operations,” the agency suspended trading of QMMM stocks for 10 days on 10 trading days.
The suspicious manipulation was “effective through recommendations made to investors by unknown people via social media and was made to investors to buy.”
QMMM Holdings shares have joined dozens of companies that have made similar moves recently in the hopes of boosting the stock by over 1,700% over the past month, after announcing it would buy and hold Bitcoin (BTC), Ether (ETH) and Solana (SOL) on September 9th.
The SEC and QMMM holdings did not respond immediately to requests for comment.
Cryptocurrency strategies unrelated to trading suspension
Carl Capolingua, senior editor at the Market Index, Market Index, told Cointelegraph that such SEC trading halts are “generally very rare due to corporate management outcomes.”
“If the SEC can link to the manager responsible for encouraging the company’s shares to return to employees, or even worse, management, the penalty, including large fines and prison time can be severe,” he added.
Capolingua said QMMM’s Crypto Pivot may have made the business more attractive to some investors, but its crypto strategy is “not a scrutiny” for the SEC, as “illicit stock promotions are the main issue here.”
IG Australia analyst Tony Sycamore told Cointelegraph that if investors want crypto exposure, “those types of Hale Mary Play aren’t the way to go about it.”
QMMM exceeds 1,700% before pausing
QMMM Holdings (QMMM) shares closed Friday at $119.40, surpassing 1,730% from around $6.50 in the past month.
QMMM surged from $11 in a day to an all-time high of $207 after it announced it would build a Crypto Analytics platform and initially spend $100 million to stockpile cryptocurrency.
SEC, FINRA, reportedly investigating the Ministry of Cryptocurrency
The SEC’s hold on transactions at QMMM is said to have been contacted by regulators and financial industry regulators to some companies that have launched the Cryptocurrency Ministry strategy following a Wall Street Journal report on Thursday.
Related: Crypto Treasury MNAV Metric “should be removed” – Nydig
The SEC and FINRA were scrutinizing the unusually high volumes and price increases in some corporate stocks prior to the publication of the crypto pivot, according to those familiar with the issue.
The SEC rules provide that businesses cannot selectively disclose private information. This is because knowledgeable information can be used to unfairly acquire or avoid losses prior to broader public disclosures.
Crypto Treasury Companies has been the hottest trend on Wall Street in recent months, reporting that over 200 new businesses have announced plans to buy and retain Crypto.
Such announcements are usually, but not always, hike the company’s stock price. However, some analysts are concerned about the market being overcrowded and can see multiple companies collapse if the value of their holdings exceeds market value.
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