Bitcoin firm in hot water with SEC after shares surge more than 6,000%

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A publicly traded Canadian bitcoin company has caught the watchful eye of the U.S. Securities and Exchange Commission after its stock ran up more than 6,000 percent in 2017.

In a statement, the SEC announced that it has suspended trading in securities of First Bitcoin Capital Corporation (BITCF) starting August 24 until 11:59 a.m. on September 7, 2017, citing concerns that the company may have not been telling the whole truth about its corporate structure.

“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,” SEC said.

The suspension was announced before the company opened for trading on Wednesday. First Bitcoin Capital’s shares, which were traded over the counter, held at US$1.79 apiece prior to the suspension, according to Bloomberg data.

First Bitcoin Capital’s stock price reached a high of $2.70 last August 14, from less than $0.30 last December 31.

On its website, the Canada-based company said it develops digital currencies and proprietary blockchain technologies, and operates digital currency exchange CoinQX as well as a network of ATMs.

“The reason we have been able to succeed without external funding is due to the fact that we early learned how to develop crypto assets on a shoe string, so to speak. This also resulted in our being able to pay off our debt which was owed to management with one of our created crypto currencies,” the company said in a statement, noting that its management has yet to sell a share of First Bitcoin Capital’s stock in spite of the rise in price per share.
First Bitcoin Capital called the suspension an “unfortunate” incident, which they are currently working to resolve.

“We believe that there is likely a misunderstanding or a simple clarification necessary and it would have been better for the SEC to ask us for this information before taking such drastic action,” the company said.