Nearly 30 Indian stock market investors have reportedly suffered losses exceeding Rs 100 crore after their US stock portfolios were reportedly liquidated without authorisation on fintech platform Stockal Securities. The proceeds were subsequently used to purchase shares of Zhibao Technology Inc., a thinly traded Chinese company, according to news reports. The alleged transactions took place on October 15, when investors found that their holdings in major US companies, including Apple, Nvidia, Amazon, Tesla, Alphabet and AMD, had been sold and replaced with Zhibao Tech shares.
Headquartered in Shanghai, China, the company was founded in 2015. The shares are listed on the US stock exchange Nasdaq. The stock of the chinese company has erased 95 per cent of investors’ wealth in the past one month. The stock price fell 99 per cent in the previous 6 months.
Zhibao Technology Inc., through its subsidiaries, provides digital insurance brokerage services in the People’s Republic of China.
The company offers general underwriter services. In addition, it provides insurance product design and customization, selection of insurance companies, technology system interconnection and delivery, customer AARRR (Acquisition, Activation, Retention, Referral, and Revenue) operation, customer service, compliance management, and data analysis.
Also, the company operates a digital insurance brokerage platform that offers a portfolio of 2B2C (to-business-to-customer) insurance tools for building the systems required for various insurance solutions.
Recently, Zhibao Tech closed a $154.7 million Bitcoin-funded private placement, establishing a corporate treasury reserve of 2,380 BTC.
The broker issued 442 million units at $0.35 each, combining one Class A ordinary share, with a par value of $0.0001 per share, and a two-year warrant exercisable at $0.35.
This makes the company the 33rd-largest corporate Bitcoin holder, surpassing firms including Core Scientific Inc. and Cipher Digital Inc.
On October 16 (India time), October 15 during US market hours, Stockal’s US brokerage & custody partner, DriveWealth, notified the fintech platform of unauthorised trading activity in 13 customer accounts, according to an official statement by Borderless.
Stockal said that an unauthorised third party appears to have accessed 26 customer accounts using valid login credentials. In 13 of those accounts, existing large-cap US equity holdings were sold, and the proceeds used to purchase thinly traded microcap securities. “Based on our investigation to date, no funds were withdrawn,” said the firm.