The Securities Exchange Commission (SEC) announced Thursday (Aug. 24) it has temporarily suspended trading in the securities of Canada-based company First Bitcoin Capital Corp. (BITCF). In a press release, the SEC said the suspension will stay in place until Sept. 7 of this year.
“The Commission temporarily suspended trading in the securities of BITCF because of concerns regarding the accuracy and adequacy of publicly available information about the company including, among other things, the value of BITCF’s assets and its capital structure,” the SEC wrote in the news release.
The SEC went on to caution broker-dealers, shareholders and prospective purchasers they should carefully consider the foregoing information, along with all other currently available information and any subsequently issued by the company.
The move on the part of the SEC comes as the government agency has already signaled it would regulate the cryptocurrency market. According to a report in Seeking Alpha published last week, the SEC said the cryptocurrencies are subject to federal securities laws.
“Offers and sales of digital assets by ‘virtual’ organizations are subject to the requirements of the federal securities laws,” said SEC chairman Jay Clayton, according to the report.
Seeking Alpha noted the regulations apply to companies that use distributed ledger or blockchain technology for things like initial coin offerings (ICOs) or token sales. Those that don’t register their offerings could be liable for violation of securities laws, the SEC said.
The reason for the regulation, according to the SEC, is “to ensure that investors are sold investments that include all the proper disclosures and are subject to regulatory scrutiny for investors’ protection,” noted Seeking Alpha.
The suspension comes at a time when Bitcoin is surging and regular investors are taking notice, particularly as the cryptocurrency's value is hitting new highs, up more than 400 percent so far this year.