Short-sellers Hindenburg Research and Culper Research said on Friday they have taken a short position on Chinese blockchain firm SOS Ltd's (SOS.N) stock, sending the company's shares down 23%.
In two separate reports, they raised concerns ranging from regulatory risk to alleged false claims by the company about its business.
SOS, formerly a consumer-lending company called China Rapid Finance, could not be immediately reached for comment outside business hours in China.
SOS shares have nearly doubled in value this year since it outlined plans to invest in cryptocurrency on Jan. 13, benefiting from a rise in institutional support for bitcoin and other digital assets.
"Stocks tied to blockchain have been on the run lately, swept up in the euphoria of bitcoin breaking all-time highs. $SOS has ridden this wave," short-seller Hindenburg said in a tweet.
The short-seller said it visited the address listed as headquarters in the company's regulatory filing and found it to be a hotel.
One of the allegations made by Culper is that SOS has not actually purchased the cryptocurrency mining rigs that it said it did.
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