Long Island Ice Tea Goes Blockchain And Gets Subpoenaed By The SEC
Last year, Long Blockchain, a beverage manufacturer, enjoyed a significant increase in its stock after changing its name and adopting blockchain technology. Prior to the pivot, the company was known as Long Island Iced Tea. However, the company’s fortunes seem to have turned, with the Securities and Exchange Commission (SEC) issuing them with a subpoena.
In response, Long Blockchain affirmed the reception of the subpoena, which requires the company to avail certain documents to the SEC. Long Blockchain has indicated that it will be cooperative during this investigation.
Notably, Long Blockchain did not reveal the nature of the documents required by the SEC. Of late, Long Blockchain has had a fair share of misfortunes. In March, the company was delisted from the NASDAQ stock exchange, resulting in a drastic drop in the value of its stock.
An attempt to be reinstated on the exchange was quashed after the firm lost the appeal. Previously, the company had warned its clients of an impending delisting because the SEC alleged that the firm was capitalizing on the growing interest in cryptocurrencies and blockchain technology to mislead investors.
For a substantial period, the SEC has been probing into companies whose stock rose considerably after integrating blockchain technology. Similar to Long Blockchain, the Riot Blockchain platform was subpoenaed by the regulatory agency and is also on the brink of being delisted on NASDAQ.
According to the SEC, the primary reason behind the investigations is to safeguard the interest of the general public. This is because a sizeable portion of companies is taking advantage of the hype around digital currencies and blockchain technology to lure investors. In January, Jay Clayton, the chairperson of SEC, said that the commission is examining the activities of business that are realigning their business models to pave way for blockchain technology.