Controversial cryptocurrency company Longfin disclosed in a filing Monday that its accounting firm has resigned from engaging with the company. The news comes one business day after the U.S. Securities and Exchange Commission said it has frozen $27 million in proceeds from insider stock sales.
Shares of Longfin (Ticker: LFIN) remained halted Monday, down nearly 50 percent for the year, after trading was stopped Friday morning.
On Thursday, April 5, Longfin said it was notified that its public accounting firm CohnReznick would no longer work with the company, effective immediately, according to an 8-K filing with the SEC. The accounting firm also told Longfin “that material weaknesses in internal control over financial reporting existed,” the filing said.
CohnReznick confirmed the filing’s contents in a letter to the SEC that was included in the document.
Shares of tiny, little-known Longfin caught Wall Street’s attention in mid-December when its stock surged more than 1,000 percent in two days after the company said it would acquire Ziddu.com, which claims it’s a microlending company using the same blockchain technology as bitcoin.
Ziddu was purchased from a private Singapore firm called Meridian Enterprises that is 95 percent owned by Longfin CEO Venkat Meenavalli, a filing showed.