Chinese Stock Exchanges Crack Down on Companies Falsely Claiming “Blockchain”

It appears that China’s stock exchanges are seeking to prevent companies from issuing misleading information in order to drive hype around blockchain technology – potentially influencing their share price.

Blockchain Mania Sweeps China’s Stock Exchanges

Chinese Stock Exchanges Crack Down on Companies Falsely Claiming “Blockchain”China’s Shenzhen Exchange has announced its intention to crack down on businesses misleading investors by seeking to associate themselves with so called “distributed ledger technology”, or “blockchain”.

The crackdown appears to comprise a response to Zheijiang Enjoyor Electronics Co. Ltd’s recent spike in share price that followed a blockchain-related announcement on Wechat approximately one week ago. The announcement claimed that an affiliate company of Enjoyor Electronics had entered into a partnership with a forensic sciences center based in Zhengjiang which will see the launch of what the company described as the world’s first blockchain-based electrical data forensic certificate. The announcement triggered an immediate spike in the price of Enjoyor Electronics’ stock – reaching its 10% trading limit.

Upon Shenzhen Exchange’s insistence that the company divulge further details pertaining to the partnership – such as when the investment in the affiliate company was made, the number of shares owned by Enjoyor Electronics, the financial figures of said business, and evidence of the purported blockchain-based forensic procedure – Enjoyor Electronics deleted the Wechat announcement.

Shenzhen Exchange to Monitor Companies Claiming Blockchain Affiliation

In recent months, an increasing number of businesses have driven spikes in their share price by cashing in on the hype surrounding blockchain and cryptocurrency technology. In December 2017, for example, a small U.S beverage company saw its share price increase by over 400% after changing its name from Long Island Iced Tea Corp, to Long Blockchain Corporation. In a similar incident, Hong Kong-based Skypeople Fruit Juice appeared to double their share value by renaming to Future Fintech.

The trend of making dubious claims of embracing blockchain innovation to boost stock prices appears to have begun to take off in mainland China. According to China Money Network, “More than 20 listed companies have been questioned by the Shenzhen and Shanghai exchanges about their suspicious speculation on blockchain.”

Shenzhen Exchange has stated that it “will closely monitor relative companies’ disclosure and their stocks in the secondary market. Companies that use blockchain to speculate and mislead investors will receive disciplinary punishment, and severe violations will be reported to the China Securities Regulatory Commission.”

Following the Shenzhen Exchange’s announcement, Shanghai Exchange followed suit, announcing that 20 companies listed on its exchange appear to be speculating on blockchain technology. Shanghai Exchange has stated that in several instances it has imposed trading halts and requested businesses to divulge information regarding ties to the blockchain industry from several.

Want to create your own secure cold storage paper wallet? Check our tools section.

21.03.2018 / 17:05 102
Exchange to Investigate Another Chinese Stock Over Blockchain Claims Exchange to Investigate Another Chinese
China's Shenzhen Stock Exchange (SZSE) is investigating the second public company within a week over a claimed blockchain partnership. According to a
Chinese Stock Exchange Cracks Down on Blockchain Claims Chinese Stock Exchange Cracks Down on
The Shenzhen Exchange in China has started cracking down on companies using misleading blockchain affiliations to boost their stock prices. Companies
Israeli Crypto Companies Banned From Stock Exchange Indices Israeli Crypto Companies Banned From
In a bid to reduce systemic risk, the Israel Securities Authority has announced that it will not include companies operating in the cryptocurrency
Israel Bars Crypto Firms from Tel Aviv Stock Exchange Indices Israel Bars Crypto Firms from Tel Aviv
Israel's securities regulator has said that cryptocurrency-related firms may not be listed on the Tel Aviv Stock Exchange (TASE) indices. According
Chinese Universities Are Pursuing Blockchain Patents Chinese Universities Are Pursuing
Several top-tier public universities in China are stepping up efforts to patent blockchain applications developed on campus. New data published on
Comments (0)
Add a comment
Comment on