China Authority Investigates A Surging Blockchain Concept Stock
A listed company that is blockchain-related in China is investigated by China Securities Regulatory Commission, a top regulator after being prominent in surging list last week.
Guangdong Great Wall Group saw its stock price soared for five days from October 24 to October 30 in the case of a sharp decline in business performance as China’s President Xi Jinping urged the country to accelerate the adoption of blockchain tech as a key direction to innovation.
On the evening of November 4, China Securities Regulatory Commission decided to initiate an investigation into due to the suspected illegal information disclosure. Yesterday, the stock price of Guangdong Great Wall Group dump 6.35%, and other blockchain concept stocks also experienced a wave of “dump and pump”.
Established in 1996, Guangdong Great Wall Group is the first creative art ceramic enterprise listed in China. In its 2018 annual report, the company linked itself with blockchain concept. Among more than 50 investment projects, 6 software copyright titles or descriptions were related to blockchain concept, according to the 2018 annual report.
The abnormal fluctuation of stock price attracts the attention of investors as well as regulators’. After a week surge, Guangdong Great Wall Group received a letter from Shenzhen Stock Exchange which calls for an explanation about the relationship between the company’s business and blockchain technology, as well as the six blockchain-related patents disclosed in the 2018 annual report. The exchange wants to know more details, including the projects’ background, cycles, amounts of investment, research team and specific use cases.
The Shenzhen Stock Exchange may suspend trading of Great Wall’s stock if it cannot provide annual reports for two consecutive fiscal years, as it has not been able to include Emerald’s financial statements in them.
On October, 5th, People’s daily, a Chinese state media said that China should attach great importance to development and management in blockchain, meanwhile, China needs to observe and track its development, establish a rule system to promote self-discipline for the industry.
Since blockchain has become a buzzword in China, companies related to blockchain in the secondary market have also gained benefits. In one week, Shanghai and Shenzhen stock exchanges issued supervision letters to 8 listed companies, focusing on the details of blockchain-related business of those companies.