In Brief
- QMMM stock spiked 960% after crypto reserve plans, then collapsed amid SEC probe.
- CZ requires all DAT firms to use third-party custodians and allow investor audits.
- YZi Labs will only fund BNB DATs with verified custody and transparent operations.
QMMM Holdings, a U.S.-listed firm, triggered market frenzy after announcing a $100 million cryptocurrency reserve initiative. The news sent its shares soaring nearly 960%, climbing from around $4 to an intraday peak of approximately $303, fueled by intense online speculation and retail investor enthusiasm.
However, the rally soon drew the attention of regulators. The U.S. Securities and Exchange Commission (SEC) and Nasdaq halted trading amid concerns over unusual trading activity and potential social media driven manipulation. At the time of the suspension, QMMM’s stock was last trading near $119, and it remains halted pending further regulatory review.
The firm’s Hong Kong office was found empty, intensifying fears that executives had fled following the collapse. Local media reported the Seaview Building location had been completely vacated after the announcement backlash.
KWAI Bun, a former TV personality and QMMM’s CEO, remains unreachable as investors demand answers. The company had only raised $8.6 million during its 2024 IPO, yet claimed plans for massive crypto investments.
CZ Calls for Mandatory Custodial Oversight for Crypto DATs
In response to the scandal, Binance founder CZ demanded stricter safeguards for digital asset treasury (DAT) companies. He insisted that all DAT firms must use independent crypto custodians and allow investor audits of account setups.
He announced this would now be a non-negotiable condition for any BNB-affiliated project seeking funding from YZi Labs. “This is a prerequisite for YZi Labs investments in BNB DATs,” CZ posted via X.
CZ’s statement followed concerns that unregulated treasury schemes could manipulate markets and mislead investors. He emphasised the need for real-time transparency and secure asset custody for all public crypto companies.
Market observers noted the QMMM case mirrors early crypto-era pump-and-dump schemes. Despite the sharp rise, the company’s operations appear to have collapsed within weeks of its announcement.
With investor trust shaken, regulatory bodies may intensify scrutiny of publicly traded firms holding digital assets. The crypto community now urges better governance and enforcement to prevent similar events.
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Source: https://coincu.com/news/qmmm-collapse-sparks-oversight-calls/