Trump supports the encryption company Alt5 Sigma, which is under investigation for allegedly violating SEC regulations.

The crypto assets company Alt5 Sigma, supported by Trump, is under investigation for possibly violating SEC regulations. The company was previously exposed for issues such as insufficient disclosure of information and improper handling of executive changes, raising regulatory concerns.

The investigation focuses on the resignation of the auditor and the delay in the financial report. Forbes reported that Alt5 Sigma's independent auditor, William Hudgens, resigned on November 21, but he stated that he had notified the company as early as the end of June and planned to stop services after the submission of the second-quarter financial report. More troubling is that the company has yet to submit its third-quarter financial report, partly due to the accounting firm's untimely response. According to SEC regulations, listed companies must disclose relevant information within four business days after an external auditor's resignation, and the auditor is also required to review the interim data of the quarterly report. Delayed reporting may raise questions from regulators.

Legal experts point out that Alt5 Sigma's delay in disclosing the resignation of its auditor and submitting its quarterly report poses compliance issues. James Park, a law professor at UCLA, stated that such delays may constitute a violation of securities laws. Additionally, there are issues regarding the disclosure of executive changes: CEO Peter Tassiopoulos has been suspended since October 16, but internal memos show he had already been suspended in September, and the company did not report this to the regulatory agency within the required timeframe.

Alt5 Sigma planned to raise $1.5 billion to establish a WLFI token reserve in August this year, with Eric Trump and Zak Folkman originally set to serve as directors and observers. However, in September, the company canceled Eric Trump's board seat, and Folkman officially became a director. The company currently holds approximately 1.1 billion WLFI tokens, and its stock price has significantly declined since partnering with World Liberty, raising concerns in the market about the company's value.

The compliance issues of Alt5 Sigma, the resignation of auditors, and delays in disclosing executive changes have made it a key focus of the SEC, and the future investigation results may have significant impacts on the company's operations and stock price.