Business

Erik Gibbs

IBITX draws SEC ire over questionable crypto operations

True to its assertion that it would begin an industry-wide crackdown on cryptocurrency-related companies, the U.S. Securities and Exchange Commission (SEC) has set its sights on another business. This time, the securities regulator has temporarily suspended all trading activities of IBITX Software.

The company was operating the IBITX over-the-counter (OTC) exchange as a “Dynamic new type of currency exchange which matches new Initial Currency Offerings (ICOs) and those interested in buying those currencies in a single platform.” It boasted of being one of the first cryptocurrency exchanges that brought together a fiat-to-crypto platform and crowd sales. It had been trading on the OTC Markets under the symbol IBXS and had a market cap of around $143 million before being suspended.

IBITX is registered as a New York corporation, but lists its primary place of business as the Philippines. The SEC took the decision to suspend the company due to the accuracy of unspecified information found in company press releases and disclosure statements that were published for investors.

One possible source of the SEC’s ire could come from a press release issued by the company on April 9. In it, IBITX announced the creation of cryptocurrency exchange software that could be licensed to financial service providers, brokerage houses and jurisdictions where cryptocurrency trading is allowed. The software purportedly offered the receiving companies the ability to create its own coins and ICOs, and gave the impression that these were automatically authorized for release without additional registration with the SEC.

SEC’s suspension order went into effect on April 23, and will end on May 4.

The SEC is beginning to take a seriously hard look at all companies in the cryptocurrency industry, especially those that offer ICOs. Several private companies, as well as exchanges, have already come under fire this year, and there are reports that the agency is working on “several dozen” more cases. After having its annual budget increased by 3% this year, the SEC is already finding ways to spend the extra funds.

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