SEC suspends trading in IBITX Software securities due to cryptocurrency platform operation

Maria Nikolova

The suspension commences at 9:30 a.m. EDT on April 23, 2018 and is set to end at 11:59 p.m. EDT on May 4, 2018.

The United States Securities and Exchange Commission (SEC) has just underlined its harsh stance regarding firms whose activities are related to cryptocurrencies. The regulator has announced a temporary suspension of trading in the securities of IBITX Software Inc. (“IBXS”), a New York corporation. The suspension starts at 9:30 a.m. EDT on April 23, 2018 and is set to end at 11:59 p.m. EDT on May 4, 2018.

The Commission attributed its decision to “questions regarding the accuracy of assertions by IBXS, a New York corporation whose principal place of business is listed as the Philippines, in press releases to investors and disclosure statements concerning, among other things, the company’s development of alternative forms of currency, and the company’s operation of a cryptocurrency platform”.

This is yet another action by the regulator taken by the SEC against companies engaged in cryptocurrency activities. Earlier this month, the regulator obtained a court order freezing more than $27 million in trading proceeds from allegedly illegal distributions and sales of restricted shares of cryptocurrency company Longfin Corp. stock involving the company, its CEO, and three other affiliated individuals.

SEC’s action against PlexCoin aka PlexCorps is also noteworthy. According to the complaint launched by the regulator against the company and its principals, from August 2017 through the present, the defendants have obtained $15 million from thousands of investors, including those throughout the United States and in the Eastern New York District, through materially false and misleading statements in an ICO scam.

Among state authorities, the Texas Securities Commissioner has been particularly active in its efforts to tackle cryptocurrency fraud. In January this year, for instance, the Texan securities regulator issued an Emergency Cease and Desist Order against Bitconnect. And a recent investigation by the Enforcement Division of the Texas State Securities Board found widespread fraud in cryptocurrency offerings. The investigation, which started in December 2017, has found that seven promoters were offering securities tied to a new cryptocurrency, whereas at least five promoters all but ignored investing risks by guaranteeing returns, some as high as 40% per month.

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