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SEC investigates tea company whose stock rose 500% after adding blockchain to its name

SEC is bringing blockchain buzzword shenanigans to an end

long blockchain, iced tea, blockchain

Long Island Tea Corp. – no, wait, Long Blockchain Corp. – might have to put an end to their name-changing adventures as the US Securities and Exchange Commission (SEC) has served them with subpoena, Bloomberg reports.

Information on the reasons behind the subpoena remains sparse, but the company has been asked to provide further regulatory documents to the SEC.

Despite having nothing to do with the technology, Long Island Tea Corp changed their name to Long Blockchain Corp in December 2017. It might seem like a minor thing, but the change caused the company’s share price to jump from under $5 million to near $70 million in a matter of days.

This is not the first time the Long Island-based tea company has gotten in trouble recently. Indeed, Nasdaq previously threatened to delist the company.

It appears its issues with the SEC this time have to do with its recent plans to restructure its business. The company founded a new subsidiary called Stran Loyalty Group, which plans to offer loyalty card, incentive and reward schemes

“The company is fully cooperating with the SEC’s investigation,” a representative for the Long Island company said. “The company cannot predict or determine whether any proceeding may be instituted by the SEC in connection with the subpoena or the outcome of any proceeding that may be instituted.”

This is likely to be a story that will develop over the coming weeks and months, but right now, it shows the power of the blockchain hype. But with the SEC getting busy, it appears the days of capitalizing on blockchain as a buzzword are numbered.

 

 

Published August 2, 2018 — 13:21 UTC