Investors interested in trendy cryptocurrency- and blockchain-related stocks were paying close attention to Longfin Corp. (NASDAQ:LFIN) on Tuesday morning after a judge apparently vacated a Temporary Restraining Order (TRO) that froze the assets of the controversial company.
Longfin first made headlines when it initiated a Reg A+ offering and listed itself on the Nasdaq in December 2017. The company’s debut was followed shortly by the announcement that it had acquired Ziddu, a blockchain-based microlending firm.
The price of Longfin shares skyrocketed after the acquisition, putting the new stock on a growing list of publicly-traded companies that surged after adding blockchain or cryptocurrencies to their business models.
Other trendy companies that made similar moves at around the same time include Riot Blockchain (NASDAQ:RIOT) —a former manufacturer of biotech diagnostics equipment—and Long Blockchain (OTC:LBCC) —which was previously a drink maker operating under the name Long Island Iced Tea Corp.
However, there has been plenty of controversy surrounding Longfin’s move into the spotlight. In fact, the Securities and Exchange Commission (SEC) recently obtained a court order freezing more than $27 million in trading proceeds from allegedly illegal distribution of restricted Longfin shares involving the company, its chief executive Venkat Meenavalli, and three other related parties.
“We acted quickly to prevent more than $27 million in alleged illicit trading profits from being transferred out of the country. Preventing defendants from transferring this money offshore will ensure that these funds remain available as the case continues,” said Robert Cohen, SEC Cyber Unit chief, at the time of the asset freeze.
When that court order was unsealed earlier this month, the Nasdaq exchange quickly halted trading of Longfin’s stock. But investors are beginning to see a brighter future for Longfin after Judge Denise L. Cote on Tuesday vacated the TRO that froze the aforementioned assets.
Nevertheless, the case SEC v. Longfin et al. remains pending before Judge Cote. The SEC has created an email address for investors with questions about Longfin and for people with any information about potential securities law violations involving the company: longfin-info@sec.gov.
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