SEC puts Canaan on preliminary delisting list.

The U.S. Securities and Exchange Commission (SEC) added Canaan, a maker of miners, to the preliminary list of Chinese companies subject to delisting from U.S. exchanges.

According to the regulator, 88 foreign-issuer firms operating under foreign jurisdictions used audit firms whose documents cannot be verified by the PCAOB. This breaches the Foreign Company Accountability Act of 2020.

The Commission noted that the ban on disclosing audit results is a position of Chinese authorities.

SEC-identified foreign issuers may appeal the regulator’s decision by May 25.

“The company is actively exploring potential solutions to protect the interests of its stakeholders. We remain compliant with applicable laws and regulations in both China and the United States, and we are committed to preserving Nasdaq listing status,” said Canaan.

According to Reuters, in April Beijing proposed changes to confidentiality rules for foreign-listed firms to allow an audit dispute with the United States. If this does not succeed, by 2024 US exchanges could delist about 240 Chinese companies.

In November 2019, Canaan became the first mining-equipment manufacturer to go public on Nasdaq. In the IPO, the company raised $90 million by issuing 10 million American Depositary Receipts (ADRs) at $9 each.

As of writing, the market values Canaan’s shares at about $3.50. In July 2021, the stock traded above $34.50, while in June 2020 it fell below $2.

Back in June 2020, another Chinese mining equipment maker—Ebang International Holdings—also went public on Nasdaq.