According to a CNBC report, the share price of Longfin, a Fintech company, dropped 30 percent after an investigation by the US Securities and Exchange Commission (SEC). The decline in stock values is thought to be influential on the Sec review. The SEC is investigating whether Blockchain technology is being used, especially for manipulation purposes.
Longfin announced on 2 April that a review by the SEC has been made. Longfin stocks closed down 30.89 percent today. Since the beginning of the year there is a decrease of 82.43 percent.
Longfin is Ziddu, a company specializing in microcredits using clever contracts and Blockchain technology, in two days in December. They announced they were buying. Longfin (LFIN), which has risen more than 1000 percent in the market after its announcement, is also known as a Fintech company on the NASDAQ list.
The SEC Executive Officer reported to Longfin on March 5th that they will investigate the purchase and sale of the company's shares, the IPO and the documents required for the acquisition of Ziddu.com. Longfin, in their 10-K filing, stated that they are cooperating with the SEC investigation:
We are in the process of responding to this request and will cooperate with the SEC in connection with the investigation. The SEC is trying to determine if there are any violations of federal securities laws. The investigation does not mean that any of the SEC has come to the conclusion that it violated the law.
Even Longfin CEO Venkat Meenavalli used the following statements, stating that the increase in the value of shares was enormous last December:
This market is not fair. I evaluated IPO pricing as $ 5. We are a profitable company. We have nothing to do with the mass that is flying in joy from these snowfalls.
The SEC has announced that in January this year, it will closely monitor firms trying to use Blockchain technology to manipulate stock prices. In this regard, it also announced that strict measures would be taken against the companies using the public-oriented enthusiasm.
