SEC Suspends Trading of QMMM Holdings Amid Crypto Treasury Manipulation Probe
The US Securities and Exchange Commission (SEC) has quickly suspended buying and selling of QMMM Holdings, citing considerations over potential inventory manipulation linked to the agency’s current pivot into cryptocurrency holdings.
Key Takeaways:
- The SEC has suspended buying and selling of QMMM Holdings over considerations of inventory manipulation tied to its crypto pivot.
- QMMM’s share value surged almost 1,800% following bulletins of crypto holdings and a $100M-backed platform.
- Regulators are increasing probes into companies utilizing crypto treasury methods amid rising fears of hype-driven market abuse.
The buying and selling halt, which took effect Monday, is ready to final 10 buying and selling days.
In its discover, the SEC mentioned QMMM inventory was probably manipulated by way of “suggestions made to traders by unknown individuals through social media,” allegedly aimed toward inflating each the share value and buying and selling quantity.
QMMM Soars Nearly 1,800% in a Day Following $100M Crypto Platform Reveal
Shares of QMMM Holdings had surged greater than 1,700% up to now month after the corporate disclosed on September 9 that it could start buying and holding Bitcoin, Ethereum, and Solana as half of a broader crypto treasury technique.
The inventory soared from $11 to an all-time high of $207 in a single day following a associated announcement to launch a crypto analytics platform backed by $100 million in crypto belongings.
QMMM final traded at $119.40 on Friday, up from roughly $6.50 a month earlier.
The suspension arrives simply days after a Wall Street Journal report revealed that the SEC and the Financial Industry Regulatory Authority (FINRA) had begun probing a number of firms over comparable crypto-linked inventory surges.
The inquiry is targeted on whether or not choose companies or people engaged in inventory promotion campaigns or improperly shared nonpublic data to profit from speedy value actions.
Crypto treasury strikes have exploded in recognition, with greater than 200 firms asserting plans to carry digital belongings in current months.
While such methods typically spark inventory rallies, analysts warn the development is turning into overcrowded and dangerous, particularly if falling crypto costs wipe out stability sheet positive factors.
Crypto Treasury Craze Unravels as Firms Turn to Debt-Fueled Buybacks
The crypto treasury technique that gained traction amongst small-cap companies in 2024 is starting to unravel, with a number of firms now launching debt-funded share buybacks to counter plunging inventory costs.
At least seven companies, together with these in gaming, biotech, and EV sectors, at the moment are buying and selling beneath the worth of their crypto holdings, elevating crimson flags amongst traders and analysts.
Critics say the tactic alerts desperation and a departure from the unique concept that crypto appreciation alone would drive shareholder worth.
Notable circumstances embody ETHZilla (previously 180 Life Sciences), which noticed its inventory drop 76% regardless of accumulating ether and rebranding.
The firm just lately secured $80 million in debt to finance a $250 million buyback. Meanwhile, Empery Digital (previously Volcon) holds $476 million in BTC however has a market cap of simply $378 million, prompting it to broaden its debt facility for comparable repurchases.
A current report from K33 Research reveals that 25% of public firms holding Bitcoin now commerce at market values beneath the price of their BTC holdings, highlighting a pointy drop in investor confidence.
The rising low cost, often known as the NAV hole, is limiting companies’ skill to boost capital, notably hurting smaller gamers like NAKA, which has seen a 96% collapse in its market worth.
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