SEC halts trading of QMMM stock after shares skyrocketed 2000%

The US Securities & Exchange Commission (SEC) announced that it has temporarily halted trading of Nasdaq-listed QMMM Holdings (QMMM) until October 10 over an alleged manipulation of its stock price.

SEC pauses trading of QMMM stock after company allegedly inflated prices

The SEC has temporarily suspended the trading of advertising firm QMMM Holdings' stock after the agency claimed the company had been inflating its share price, according to a filing on Monday.

The filing claims that QMMM manipulated the trading of its stock through "recommendations" suggested to investors by unknown personnel on social media, encouraging them to purchase its shares. The event was also notably targeted at sending prices up.

The halting of QMMM trading will last until October 10, although the regulator did not mention any further action that it will take.

QMMM's stock surged after the company disclosed earlier in the month that it would be shifting toward a digital asset strategy. The company revealed at the time that it planned to establish a crypto treasury focused on Bitcoin (BTC), Ethereum (ETH) and Solana (SOL), with an initial investment of up to $100 million.

The Hong Kong-based firm's shares rose 1,700% after the initial announcement and have since registered a 2,000% gain this month. The shares stood at $119 before trading was halted.

The development reflects a series of backlashes that crypto treasury firms have received due to the nature of their treasury plans. Critics argue that companies tend to shift towards a crypto treasury strategy to boost their stock performance due to the large gains that are common with digital assets.

These accusations have led to increased oversight of crypto treasuries over the past month. Earlier in the month, Nasdaq tightened its grip over crypto treasury companies, requiring some of them to secure shareholder approvals before issuing new equity to fund their crypto reserves. The exchange also outlined plans to delist companies that fail to comply.

The Wall Street Journal (WSJ) also reported on Friday that the SEC and the Financial Industry Regulatory Authority (FINRA) had contacted certain companies regarding unusual trading activity ahead of their announcements regarding digital asset treasuries.

The report claimed that regulators reached out to an estimated 200 companies that disclosed a crypto treasury pivot this year.