American company QMMM Holdings found itself at the center of a major scandal after a sudden stock crash. Shares, which soared by 960% after the announcement of a $100 million crypto reserve, collapsed amid an SEC investigation and suspicions of market manipulation.
A meteoric rise and crash in a matter of days
At the beginning of the week, QMMM announced plans to create a $100 million cryptocurrency reserve. This sparked a frenzy among retail investors: the stock price jumped from $4 to $303 per share. But the rapid growth quickly turned into a collapse.
The U.S. Securities and Exchange Commission (SEC) suspended trading, citing ‘abnormal activity’ and possible influence from social media. The shares had already dropped back to $119 before trading was frozen.
Vanished office and unreachable CEO
After trading was halted, investors began demanding explanations. However, according to Hong Kong media reports, QMMM’s office in the Seaview building was completely empty. The company’s management, including CEO and former TV star Kwai Bun, is out of contact.
This raised suspicions that the management had left the country. Especially considering that during the IPO in 2024, the company raised only $8.6 million, and now announced plans for crypto investments many times larger.
Market reaction and CZ’s position
Amid the scandal, Binance founder Changpeng Zhao (CZ) called for stricter oversight of digital assets held by public companies. He proposed requiring all firms with digital asset reserves (DAT) to use independent custodians and provide investors with audit opportunities.
‘This will become a mandatory requirement for any BNB projects seeking investment from YZi Labs,’ CZ stated on X.
According to him, non-transparent schemes with digital reserves threaten market stability and undermine trust in public crypto companies. He stressed that transparency and secure asset storage should become the industry standard.
A new signal for regulators
The QMMM case became another example of ‘pump-and-dump’ schemes known since the early days of the crypto market. In a short period, the company went from rapid growth to total collapse.
Analysts note that now regulators may tighten oversight of companies holding digital assets, especially those whose shares are traded on traditional exchanges.
Investors who lost funds are demanding investigation and compensation, while the crypto community is calling for governance reforms and transparency in the DAT segment.
What’s next?
The QMMM story showed how vulnerable public crypto firms are without independent oversight and custodial supervision. If CZ’s proposals are supported by the industry, the digital asset market could move to a more mature and secure model.
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