SEC Continues with Freezing Assets for Longfin Corp

Asset Freeze Continues for Public Company That Pivoted to Cryptocurrency

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  • US SEC continues with asset freezing for Longfin Corp, a company that pivoted to crypto.
  • More than $27 million associated with the case has been frozen.

United States: In January, reported that Jay Clayton, the US SEC Chairman, is launching a crackdown on any firm that that manipulates their stock prices using public enthusiasm that surrounds the Blockchain Tech, and one of the affected companies was Longfin Corp, a fintech firm accused of insider trading last month.

SEC has not relented on its move to freeze asset of public companies that pivoted to crypto. On Tuesday 1st May, Denise Cote, a US District Judge, stated that the SEC has a good chance of proving that Suresh Tammineedi, Dorababu Penumarthi, and Amro Altahawi illegally benefited from the pivot. The stock price of Longfin soared by more than 2,000 percent last year after it announced the acquisition of a blockchain startup.

Cote wrote in the court order:

“The SEC has shown that it is likely to prove at trial that these defendants participated in an unregistered, illegal public offering of the stock of Longfin Corp.”

As part of this decision, Cote granted a preliminary injunction to the SEC and also hold that the $27 million worth of assets owned by Altahawi, Tammineedi, and Penumarthi that the SEC sought in April be frozen.

As previously reported, the US SEC asserts that Longfin Corp sold “tens of thousands of restricted shares” to Suresh Tammineedi and Dorababu Penumarthi and “over two million unregistered, restricted shares.”

Venkata Meenavalli, the Longfin’s CEO, was also previously named as a defendant in the case, however, on 23rd April, Cote unfroze the assets of both Longfin and Venkata after Venkata demonstrated that neither he nor Longfin benefitted from the allegedly illegal offering.

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