In December the SEC promised that when it came to ICOs, they would “police this area vigorously”, and they’re making good on their word. They have just announced that they have “suspended trading in three companies” due to unresolved questions around “statements they made about the acquisition of cryptocurrency and blockchain technology-related assets”.

The three companies share a chief executive in common: Patrick J. Johnson, the Super Bowl winning former wide receiver for the Baltimore Ravens. Mr. Johnson is yet to comment on the suspensions other than to assure shareholders that, “the company will be complying with any regulatory inquiry during this period as requested.”

The suspension is temporary, running until March 2nd. The three companies are Cherubim Interests, PDX Partners, and Victura Construction Group. All are traded over the counter and each company has a market cap under $5 million.

According to the SEC, Cherubim Interests failed to lodge the necessary annual and quarterly reports, while for all three companies there are questions “regarding the nature of the companies’ business operations and the value of their assets”.

Alarm bells rang when each company claimed it had “acquired AAA-rated assets from a subsidiary of a private equity investor in cryptocurrency”. That company is the “NVC Fund”, a blockchain investment fund chaired by Reverend Frank Ekejija. Reverend Ekejija told CNBC that the NVC Fund has assets of $10 trillion, which would be “more than the whole private equity industry.”

Cherubim Interests also announced on January 3rd that it had “executed a financing commitment of $100,000,000 to launch [an] initial coin offering”. The ICO was for the “Self Sustaining Intentional Communities Coin (Symbol SJT),” with an aim to “create self-sustaining intentional communities across the US and across 57 nations”. The company’s website makes no mention of the ICO, though it does promote “BudCube”, a cannabis-cultivation system.

The SEC took the opportunity to remind investors to be vigilant, even with small companies with low stock prices. Michele Wein Layne, Director of the Los Angeles Regional Office, said that investors should be particularly wary of “penny stock companies that have switched their focus to the latest business trend, such as cryptocurrency, blockchain technology, or initial coin offerings”.

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