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The U.S. Securities and Exchange Commission (SEC) has suspended the trading of shares in an OTC-traded technology company over questions about the accuracy of a planned initial coin offering (ICO).

Issued August 9, the order was made against a firm called CIAO Group (now rebranded as NuMelo Technology), which trades on markets operated by OTC Markets Group. NuMelo first announced plans for an ICO on July 6, at the time indicating a desire to bring a “digital financial products marketplace” based on blockchain tech to the African market.

The company’s website reveals details about its aspirations, with a blog post from May noting that the firm recently saw a management change, and that it was looking to embrace a new business strategy.

In subsequent press releases, the firm blurs the lines between its ideas, evoking the power of blockchain, promising a “$530 billion target market collaboration” and making bold claims about the ability of the technology to revitalize economic access in developing markets.

A June 15 press release reads:

“African public stocks from multiple African countries traded in a single cryptocurrency on US trading platforms cleared through DTCC accepted blockchain transactions could monumentally increase the liquidity of investments in African public companies, and give the average individual US investor new access to the extraordinary growth opportunities only found within frontier markets.”

Ultimately, however, it may be statements like these that influenced the SEC’s decision, as the agency cited questions about the “accuracy of assertions” made by the company “with respect to business plans” and its plans for an ICO as key reasons for the move.

The suspension began today at 11:59 p.m. EST, and is scheduled to last until August 23.

Notably, the announcement follows an uptick in SEC supervision of the cryptocurrency markets, particularly as it relates to the nascent ICO sector.

In June, the SEC took action against a Florida firm over similar concerns, suspending its trading on over-the-counter (OTC) markets, a move that was followed by its landmark ruling that a cryptographic token issued by a project called The DAO met its definition of a security.

Cyberlaw image via Shutterstock

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