Thursday, November 26, 2020
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SEC Freezes Vortex Blockchain Stock, Cites Confusion Over Business Model

The United States Securities and Exchange Commission (SEC) has stepped up its enforcement against another blockchain company. Earlier this week, the financial watchdog announced that it had placed a temporary trading suspension on the stock of Vortex Blockchain Technologies Inc., a blockchain company with the backing of a former Presidential campaign staffer. 

The Company Needs More Operational Clarity 

As the SEC’s press release explained, it had become confused over Vortex Blockchain, the nature of its business operation, and the value pf its asset. The company, which used to be known as UA Granite Corporation, has been developing blockchain applications for a while. Amongst other things, it has worked on cloud mining, a crypto exchange and wallet application, and it dabbled in the development of blockchain hardware and software. 

The company was founded in 2013, although it merged with Vortex Networks LLC. In 2018y. Its chief executive, Craig Bergman, was the former Political Director for Ron Paul, a former United States Representative who ran for president on the Republican platform in 2012.

While Vortex began trading this year, it has been on the SEC’s radar for quite some time. In 2019, a 10-Q Report from the agency explained that the firm had been a going concern, adding that its operations relied primarily on loans from the board of directors and the sale of securities.

As the new press release confirms, the stock suspension will be lifted on October 6. It’s unclear whether the SEC plans to enforce any more penalties against the firm in that time. 

SEC Effectively Kills Unikrn Token

Action against Vortex is just the attest in moves by the SEC to maintain a clean and moderately regulated crypto space.

Earlier this month, the financial watchdog accused Unikrn, a betting platform, of running an illegal Initial Coin Offering (ICO) at the height of the crypto boom in 2017. According to an official statement, the SEC claimed that Unikrn had proceeded with listing its asset, UnikoinGold (UKG), without getting proper approval. 

The Unikrn UICO was launched in September 2017, just a few months before the crypto market hit its all-time high. The company offered its token to investors, with data from ICO Bench confirming that it received $28.6 million. The SEC, however, disputed that data, claiming that Unikrn actually got closer to $31 million. CNBC reported that one of the company’s top backers was Mark Cuban, the billionaire investor and owner of the Dallas Mavericks. 

While Unikrn placed itself as a betting platform for the esports industry, the SEC eventually clamped down on it. The regulator’s statement explained that Unikrn had agreed to pay $6.1 million in legal penalties. The company also added that it would distribute all of its assets back to investors via a Fair Funds.

“Unikrn also agreed to disable the UKG, publish notice of the order, and request removal of UKG from all digital asset trading platforms,” the press release added.

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