Shares of Hong Kong-Based UBI Blockchain Suspended by SEC
The Securities and Exchange Commission (SEC) has halted trading in UBI Blockchain Internet Ltd. (UBIA) over “unexplained market activity,” a sign that regulators were continuing to clamp down on assets tied to cryptocurrency.
The U.S. securities regulator announced Monday that it was suspending UBI Blockchain shares from being traded until the company answers questions about the accuracy of its financial statements.
UBI Blockchain surged more than 900% last year, bringing its total market value north of $800 million. All this, and the company has yet post any revenue. It also failed to give regulators a working phone number during public filing.
Company chief Tony Liu said the SEC’s decision is “understandable due to the recent frenzy of buying stock related to the bitcoin phenomena.” However, Liu reminded that his company was not involved in cryptocurrency.
“We believe the general public is confusing our blockchain technology with bitcoin companies,” Liu said in a statement that was quoted by Bloomberg. UBI was “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.”
Blockchain is the pioneering technology that underlies bitcoin and other cryptocurrencies, but can exist independently of those systems. Its vast use case has attracted attention from banks, governments and businesses in pursuit of more transparent audit trails.
The Rise of Crypto Stocks
So-called ‘crypto stocks’ have benefited from the euphoria surrounding digital currencies. Their popularity has grown in lockstep with bitcoin among investors who want to capitalize on the crypto revolution without the added volatility of owning the underlying assets.
There’s a long list of companies that can offer indirect exposure to cryptocurrency. Some of the more popular include AMD (AMD) and Nvidia (NVDA), whose chips are used for mining virtual currency.
Digital Power (DPW) is a manufacturer of power-supply products that is venturing into cryptocurrency-specific equipment. Meanwhile, Overstock.com is an online retailer that not only accepts bitcoin, but is launching a mega ICO through its subsidiary tZero.
In addition to stocks, traditional investors can choose from Grayscale’s Bitcoin Investment Trust (GBTC), which holds BTC tokens in a fund that is similar to an ETF, as well as futures contracts offered by CME and CBOE. Efforts to bring bitcoin to the ETF market are also ongoing.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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