SEC Suspends NuMeLo Technology Shares Trading Over ICO Plans

Many companies and projects see cryptocurrency ICOs as the new way to raise funds. Crowdfunding has become somewhat popular in the financial sector lately. An ICO, however, is largely unregulated and attracts investors from all over the world. NuMeLo Technology had a plan to host their own ICO in the future. However, the SEC has a different opinion about this plan. As a result, they suspended the trading of shares in this OTC-Traded technology company.

Things have gone from bad to worse for NuMeLo Technology. The company is quite successful on the OTC Markets Group. The company is actively looking to raise additional money as well. Their plan was to run a cryptocurrency ICO to make this happen. The plans have been public since July 6th, but the SEC is one step ahead. Now that these plans are known, the company’s shares are temporarily suspended by the SEC. A very strange turn of events, to say the least.

NuMeLo Technology Catches the SEC’s Attention

The decision for this upcoming ICO was made not too long ago. A blog post explains how a new management team is running things right now. A change of business strategy requires more financial means, which is to be expected. However, the company makes some odd claims which concern the SEC, by the look of things. Promising a US$530bn target market collaboration using blockchain technology is pretty ambitious. Such statements often influence decisions made by the SEC. Attempting to ICO may be the biggest mistake the company has made to date.

A press release regarding this ICO was issued three weeks ago. It mentions how the company wants to trade African public stocks from many different countries. NuMeLo Technology will do so using a single cryptocurrency on US trading platforms. Giving US investors access to growth opportunities is commendable. However, NuMeLo Technology’s description of this ICO almost makes it sound like a scam. It’s only normal the SEC wants to prevent that from happening. In fact, the SEC is concerned about the accuracy of assertions made by NuMeLo Technology.

All of this shows ICOs can become a very big threat in the long run. Publicly traded companies now see this method as a way to raise millions without going through traditional channels. That will have repercussions up to a certain degree in the future.  For now, the NuMeLo Technology shares remain suspended until August 23rd. It is possible they will be suspended further after that date, though. An official investigation by the SEC appears to be underway as we speak. Given the institution’s stance on ICOs lately, this move isn’t all that surprising, though.

Source: Newsbtc