It’s been a tough week for Longfin, the one-year-old company that raised eyebrows in December 2017 when its so-called pivot to blockchain sent shares soaring on the day of its initial public offering. Trading in Longfin shares was halted by Nasdaq on Friday following news that the Security and Exchange Commission obtained a court order to freeze more than $27 million in trading proceeds that the agency believes the CEO and several associates gained by selling unauthorized stock in the company.

According to the complaint, Longfin CEO and controlling shareholder Venkata Meenavalli issued more than 2 million unregistered and restricted shares to Andy Altahawi, the corporate secretary and director of Longfin. He also allegedly released tens of thousands of restricted shares to two other individuals, Dorababu Penumarthi and Suresh Tammineedi, who “illegally sold large blocks of their restricted Longfin shares to the public while the stock price was highly elevated,” the SEC alleges.

Representatives for the company did not immediately return a request for comment. The news comes as authorities are cracking down on shady operations and fraud within the booming blockchain and ICO market, and the allegations of the Longfin stock sales are likely to further damage investor confidence in the nascent market.

Longfin first incorporated in February 2017 as a self-described financial technology company, according to company filings. Longfin’s “core technology platform,” as it describes it, connects “global exchanges” and uses “artificial intelligence and deep machine learning to trade and hedge the risk in continuous time.”

The company gained attention in December as one of the first companies to leverage bitcoin mania to skyrocket its company value. This pivot which came just days before the most infamous case of the Long Island Iced Tea company, which saved itself from getting kicked off the NASDAQ by changing its name to Long Island Blockchain, which propped up its slouching market cap. Read more from businessinsider.com…

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