A firm that witnessed its value skyrocket by 2600 percent back in December after the astronomical rise in Bitcoin prices on Tuesday saw a US federal judge put a freeze on assets worth $27 million belonging to the individuals behind it.
A federal district court in Manhattan ruled on Tuesday in favor of a motion filed by the Securities and Exchange Commission (SEC) to allow a preliminary injunction and a continued freeze on $27 million in assets belonging to Andy Altahawi, Dorababu Penumarthi, and Suresh Tammineedi, a trio associated with Longfin Corp.
US District Judge Denise Cote noted that the trio will possibly lose a trial against them as he expects that the government will most likely come up with evidence that the three individuals illegally gained from the supposed sales of regulated shares.
In handing down his ruling on the asset freeze, the judged stated that “The SEC has carried its burden of showing a likelihood of success of proving at trial that the three defendants violated Section 5 in selling their shares.”
Back in December 2017, Longfin, which claims to be a FinTech firm, saw its value increase by 2,600 percent after it revealed its purchase of Ziddy.com. In announcing that acquisition, the firm stated that it had bought a “blockchain-empowered global micro-lending solutions provider.”
That announcement was made at a time Bitcoin prices had surged beyond $19,500 in an extraordinary bullish run. Longfin market capitalization also rose above $3 billion after it started trading on NASDAQ.
The SEC has claimed that the trio illegally sold regulated company shares to the public at a time when the stock’s price was at its peak, leading to profit of more than $27 million.
“We acted quickly to prevent more than $27 million in alleged illicit trading profits from being transferred out of the country,” said SEC Enforcement Division’s cyber unit chief Robert Cohen in April, upon receiving a court order to freeze funds belonging to the individuals and the company. “Preventing defendants from transferring this money offshore will ensure that these funds remain available as the case continues,” he added.