Chinese Exchange to investigate LifeSense Stock over Blockchain claims

According to a letter issued on Tuesday, China’s Shenzhen Stock Exchange (SZSE) is investigating LifeSense stocks. This is the second time in a week that SZSE is investigating a public company over a claimed blockchain partnership.

LifeSense

Lifesense is a healthcare device maker company based in China. It had announced a few days ago that it will partner with a blockchain startup to launch a research lab. Also, the purpose of the collaboration was to boost blockchain adoption in the healthcare sector. And as expected, soon after the announcement,  its stock price surged by 10 percent. And thus it reached the SZSE’s daily limit. This drew attention from the exchange, which not only lists public stocks but also self-regulates public firms to comply with securities law in China.

The bourse has halted public trading of Lifesense stock.  And it has also ordered the company to submit a range of details to substantiate the research lab claim. These details include Lifesense’s investment stake, how the lab operates, its number of staff and expected projects in the next three years, among other information.  In essence, the firm is being questioned whether it’s taking advantage of blockchain hype to intentionally drive up its share price.

SZSE regulation

The probe came just a day after a report on Monday. SZSE had ordered another public company to submit evidence to prove a blockchain trial completion claim. SZSE’s repeated investigation signals show the exchange’s efforts to crack down misleading claims of companies, that may or may not be true. In mid-January, the SZSE published a warning through its WeChat channel. It had noticed companies driving up stock prices following blockchain-related initiatives. And according to a report, currently, Shenzhen and Shanghai Stock Exchanges is questioning a total of over 20 public companies.

Also read: KodakCoin ICO postponed, future uncertain.

 

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