BTC Wires: In recent news associated with the blockchain ecosystem, the United States Securities and Exchange Commission (SEC) has deemed it of the utmost importance to investigate the companies carrying out blockchain-based frauds more closely. They have decided to check out all those companies that use false names to promote their stock value spike, which constitutes a major part of blockchain fraud.
SEC came about a realization that several companies are carrying out certain “rebranding” tactics without being related in any sense to blockchain technology. This is being carried out so that companies can put in new shares out there in the stock market. This is a definite form of blockchain fraud that ultimately leads to a massive discrepancy in the prices, despite there being no change of direction by the company. It is natural to associate the term “blockchain” with a genuine digital currency platform, but when popular companies and corporate houses indulge in a rebranding of this term, it could significantly impact not just the real cryptocurrency companies but their users too.
One such company that SEC zeroed in on was the UBI Blockchain Internet Ltd. that despite its super techy name, deals in household goods, kid’s clothes, maternity clothes, and cosmetics. Dissolving these and countless other fraudulent activities is the primary goal of SEC right now. The SEC, as a part of the investigation done by the Financial Industry Regulatory Authority and the Microcap Fraud Task Force also deduced that using the term “blockchain” was a very clever tactic by these companies who were selling illegal shares at unsanctioned prices to commit fraud.
According to their official press release, “The SEC’s complaint alleges that Jesky, and DeStefano, both residents of Nevada, received 72,000 restricted shares of UBI Blockchain stock in October 2017 and were permitted to sell the shares at a fixed price of $3.70 per share under the registration statement. Instead, the complaint alleges that Jesky and DeStefano unlawfully sold the shares at much higher market
prices – ranging from $21.12 to $48.40 – when UBI Blockchain’s stock experienced an unusual price spike.”
The SEC is taking strict actions against such unlawful activities, and they have already issued a suspension of UBI Blockchain Internet Ltd. for feeding wrong information to the stock market for monetary gains.