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SEC Halts Trading of QMMM Holdings Due to Investigation into Cryptocurrency Treasury Manipulation
The US Securities and Exchange Commission (SEC) has temporarily halted trading of QMMM Holdings, citing worries regarding possible stock manipulation associated with the company’s recent shift towards cryptocurrency investments.
Key Takeaways:
- The SEC has suspended trading of QMMM Holdings due to concerns of stock manipulation related to its cryptocurrency transition.
- QMMM’s stock price skyrocketed nearly 1,800% following announcements regarding its cryptocurrency holdings and a $100 million-backed platform.
- Regulators are intensifying investigations into companies employing crypto treasury strategies amid rising concerns about market abuse driven by hype.
The trading suspension, which commenced on Monday, is scheduled to last for 10 trading days.
In its announcement, the SEC indicated that QMMM stock may have been manipulated through “recommendations made to investors by unknown individuals via social media,” allegedly intended to inflate both the stock price and trading volume.
QMMM Rises Nearly 1,800% in a Day After $100M Crypto Platform Announcement
Shares of QMMM Holdings had increased by over 1,700% in the past month after the company revealed on September 9 its intention to start acquiring and holding Bitcoin, Ethereum, and Solana as part of a broader crypto treasury approach.
The stock surged from $11 to an all-time peak of $207 in a single day following a related announcement about launching a crypto analytics platform backed by $100 million in digital assets.
QMMM last traded at $119.40 on Friday, up from approximately $6.50 a month prior.
The suspension comes just days after a Wall Street Journal report disclosed that the SEC and the Financial Industry Regulatory Authority (FINRA) had initiated investigations into several companies regarding similar crypto-related stock increases.
$QMMM trading suspended
11:59 PM ET on October 10.
Did someone significant who was short complain and request more time?
“The Commission temporarily suspended trading in the securities of QMMM because of potential manipulation in the securities of QMMM effectuated through… pic.twitter.com/azACK39W94— kristen shaughnessy (@kshaughnessy2) September 29, 2025
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The investigation is centered on whether certain firms or individuals participated in stock promotion efforts or improperly disseminated nonpublic information to capitalize on swift price fluctuations.
Crypto treasury strategies have surged in popularity, with over 200 companies announcing intentions to hold digital assets in recent months.
While such strategies frequently lead to stock rallies, analysts caution that the trend is becoming saturated and precarious, particularly if declining crypto prices erase balance sheet gains.
Crypto Treasury Trend Unravels as Companies Resort to Debt-Fueled Buybacks
The crypto treasury strategy that gained momentum among small-cap firms in 2024 is starting to unravel, with several companies now initiating debt-funded share buybacks to mitigate falling stock prices.
At least seven firms, including those in gaming, biotech, and electric vehicle sectors, are currently trading below the value of their crypto holdings, raising concerns among investors and analysts.
Critics argue that this approach indicates desperation and strays from the original premise that crypto appreciation alone would enhance shareholder value.
Prominent examples include ETHZilla (formerly 180 Life Sciences), which experienced a 76% decline in its stock despite accumulating ether and undergoing a rebranding.
The company recently obtained $80 million in debt to finance a $250 million buyback. Meanwhile, Empery Digital (formerly Volcon) holds $476 million in Bitcoin but has a market capitalization of only $378 million, prompting it to expand its debt facility for similar repurchases.
A recent report from K33 Research indicates that 25% of public companies holding Bitcoin now trade at market values below the worth of their BTC holdings, underscoring a significant decline in investor confidence.
The increasing discount, referred to as the NAV gap, is constraining firms’ ability to raise capital, particularly impacting smaller entities like NAKA, which has experienced a 96% drop in its market value.
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