The U.S. Securities and Exchange Commission (SEC) temporarily suspended trading in shares of crypto treasury firm QMMM Holdings after concerns of potential manipulation surfaced. The move comes just a week after reports surfaced that regulators were probing similar firms.
In a notice issued Monday, the SEC said the halt would last 10 trading days, explaining that the suspension stemmed from “recommendations, made to investors by unknown persons via social media to purchase” QMMM stock — activity it believes was intended to artificially inflate price and trading volume.
The suspension follows a meteoric rise in QMMM’s stock price, which surged more than 1,700% in the past month, climbing from around $6.50 to over $119. The rally was sparked by the company’s Sept. 9 announcement that it would begin buying and holding Bitcoin, Ether, and Solana, joining a wave of firms attempting to capitalize on crypto holdings to boost valuations.
Despite speculation, analysts suggest the SEC’s action is tied to stock promotion, not QMMM’s crypto strategy. Carl Capolingua, senior editor at Market Index, noted that such suspensions are “very rare” and could lead to severe penalties — including fines or jail time — if the individuals behind the promotions are linked to company insiders. He added that QMMM’s pivot to crypto was unlikely to be a focus of regulatory scrutiny.
Tony Sycamore, an analyst at IG Australia, cautioned investors against speculative plays like QMMM, saying they are “not the way to go about” gaining crypto exposure.
QMMM shares briefly soared to an all-time high of $207 in a single day after it announced plans to develop a crypto analytics platform and initially allocate $100 million toward digital assets.
The SEC’s action also comes amid a broader probe into “crypto treasury” firms. According to the Wall Street Journal, both the SEC and the Financial Industry Regulatory Authority (FINRA) have contacted multiple companies that recently adopted such strategies, examining trading volumes and price movements ahead of their public announcements.
Regulators have warned that selectively disclosing nonpublic information breaches securities laws, allowing insiders to profit unfairly.
More than 200 companies have announced plans to build crypto treasuries in recent months, making it one of Wall Street’s hottest trends. While many have enjoyed stock price boosts, some analysts warn the sector is overcrowded and could face a shakeout if valuations of crypto holdings exceed company market caps.
