SEC Slams U.S. Firms in China-Linked Pump-and-Dump Crackdown

U.S. regulators just dropped the hammer on domestic companies facilitating Chinese market manipulation schemes.

The Enforcement Blitz

SEC investigators uncovered coordinated pump-and-dump operations originating from China—with American firms providing the infrastructure. These outfits allegedly enabled artificial price inflation through misleading promotions before dumping assets on unsuspecting investors.

Cross-Border Complications

Enforcement actions highlight the growing challenge of regulating borderless digital asset markets. Despite the "decentralized" fantasy, old-school fraud still needs traditional banking channels to cash out—proving even crypto scammers eventually need to touch fiat.

Regulators are playing whack-a-mole while Wall Street still can't tell a blockchain from a spreadsheet—some things never change.

Nasdaq tightens IPO rules to block weak China listings

To make these China-connected frauds harder to pull off, Nasdaq is throwing new rules into the mix. They’ve decided that anyone wanting to list on their exchange, especially if they operate mainly in China, better have at least $25 million in public offering proceeds.

That means no more listing sketchy micro-companies with nothing in the tank. If your numbers don’t add up, you’re not getting in.

On top of that, Nasdaq now demands that any company going public under the net income standard must also have at least $15 million in public float value. This rule helps keep garbage IPOs off the exchange. They’re also speeding up the process to suspend and delist companies that don’t meet listing standards and have a market value of listed securities under $5 million.

Basically, Wall Street is cleaning house. John Zecca, the EVP and Chief Legal, Risk & Regulatory Officer at Nasdaq, said,

“It provides a healthier liquidity profile for public investors, while still making emerging companies available to investors through our exchange.” He also made it clear: “Investor protection and market integrity are central to Nasdaq’s mission.”

Nasdaq had submitted these new rules to the SEC for approval, which it just got. Companies already trying to list will get 30 days to finish using the old standards. After that, it’s either comply with the new requirements or get out.

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