SOS Limited (SOS), a Chinese tech service company providing blockchain services and specializing in marketing data, is facing an investigation for potential claims such as going against federal security laws and to produce remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, against the company. SOS stock declined sharply adjacent to the news.
SOS is facing an investigation for claims such as having acquired more than 15,000 mining rigs from HY International Group, for $20M, and claiming that 5000 of those mining rings had gone live after 30 days. The complaint alleges that defendants made misleading statements, and consisted of a false stock promotion scheme that had undisclosed transactions, Hence, most public statements by the company were misleading or fabricated.
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At the last check in premarket trading, shares of SOS Limited (SOS) declined -4.28% at $3.80. For the last six months, the stock has soared 45.42%, and over the last three months, the stock has increased by 82.95%. The number of shares exchanged was 30.28 million, less than the company’s 50-day daily volume of 85.5 million
First Quarter Mining Results
The company has confirmed the receipt of the batch of 5464 cryptocurrency mining rigs. If the machines go live and operate as predicted, the ROI is expected to be extremely profitable. However, various factors effecting Hash rates such as re-configuration and time for proper maintenance can have an impact on the performance.
The Company has generated 42 Bitcoins and 916 ETH, in the first quarter of 2021, and is expected to use the proceeds from its public offering last month, to further expand its cloud cryptocurrency mining and cryptocurrency security and insurance business,as well as to generate adequate capital to produce a facility in Hejiang County, Luzhou, Sichuan.
HoweverHindenburg Research and Culper Research’s claims of SOS being an intricate ‘Pump and dump’ scheme, and rumors of HY being a fake shell company has severely damaged the company’s reputation and substantially declined SOS stock price, with investors believing SOS public statements lacked a reasonable basis at all relevant times.
An investigation regarding possible breaches of Federal laws and allegedly fabricated public statements has tumbledSOS stock price, with investors uncertain about the company’s future. However, confirmation of generating 42 BTC and 916 ETH has raised investor interest, especially in the Reddit community.