Chinese regulators investigate a suspicious blockchain firm
|- The Great Wall Group witnessed a surge in its stock prices last week.
- The investigators are reportedly looking for potential violations of information disclosure regulations.
After becoming one of the most sought-after blockchain stocks last week, Guangdong Great Wall Group is under investigation by a top Chinese investigator. The firm’s stock price surged for five days after China’s president Xi Jinping praised blockchain technology last week. The firm said that it was under investigation by the China Securities Regulatory Commission (CSRC).
Having started as a creative porcelain company, Great Wall Group disclosed information about six blockchain projects in its 2008 annual report. Investigators have questioned the authenticity of this blockchain push concerning its recent stock bump. The investigators are looking for potential violations of information disclosure regulations, according to the firm’s filing with the Shenzhen Stock Exchange.
The filing said:
According to the Securities Law of the People’s Republic of China, the committee of CSRC has decided to open an investigation against the firm.
As per a separate filing, ChiNext, a NASDAQ-style board for the Shenzhen Stock Exchange, had earlier requested the firm to explain how it was connected to the blockchain industry. The exchange demanded information about projects’ background, cycles, amounts of investment, research team and specific use cases. Additionally, it asked about profit-related details from the projects.
The firm responded by saying that its internet training subsidiary Zhiyou Education is developing two of its six projects. The remaining four are from its recently acquired education wing, Emerald Education Group.
In a June filing with the Shenzhen Stock Exchange, Great Wall Group said, “we have lost control over Emerald Education.” The firm added:
The subsidiary no longer provides any financial statements and reports to us. Therefore we are not able to explain how Emerald Education is related to the blockchain technology.
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