The Securities and Exchange Commission (SEC), which is the chief financial watch-dog for trading portals and financial security regulation in the United States (US) has temporarily suspended trading in the securities at Bitcoin Generation Inc.
Bitcoin Generation Inc. (“BTGN”) based in Oklahoma provides trading in about 1000 cryptocurrencies, P2P Exchange platform and also claims to mine Bitcoin and, an altcoin. Furthermore, the hash rate can be rented on demand at the firm.
The SEC has suspended trading activities at the firm effective from 9:30 a.m. EDT on April 29, 2019, and terminating at 11:59 p.m. EDT on May 10, 2019. The commission states that it has temporarily suspended the license due to concerns about the accuracy and adequacy of information in the marketplace concerning the following listed issues:
- viability and valuation of a bond that BTGN purportedly acquired from an entity based in the United Kingdom
- SEC raised doubts on the promotional activities of the firm and whether or not it was creating a bad name in the market, and
- the accuracy and adequacy of current public information regarding BTGN’s financial condition and their outstanding stocks.
SEC Lays Down Rules for Traders and Broker Too
According to the press-release, pursuant to rule 15c2-11 under the Exchange Act, the traders and brokers must follow the guidelines completely before placing any quotations on the Exchange even after the suspension period has been lifted.
The press release stated that the traders must educate themselves before trading on the suspicious Exchange because uninformed mistakes would also be liable to punishment. The press release clearly stated:
“If any broker or dealer is uncertain as to what is required by Rule 15c2-11, he should refrain from entering quotations relating to BTGN’s securities until such time as he has familiarized himself with the rule and is certain that all of its provisions have been met… in violation of
the rule, the Commission will consider the need for prompt enforcement action.”
A Government crackdown is not necessarily negative news as after the crack-down the Exchanges can resume operations after following the compliances laid down by the respective financial authorities of the state.
Will this be an isolated event or more aggressive crack-down will follow on other Exchanges as well? Please share your views with us.