In March of this year, John Oliver of HBO's Last Week Tonight famously skewered crypto scams. To illustrate the craze surrounding cryptocurrencies and the blockchain technology that supports them, he explained that some companies were changing their names to incorporate blockchain – without any experience or foothold in the industry – and watching their stock prices soar.
One of these was a purveyor of iced tea and lemonade, Long Island Iced Tea Corp., which changed its name in December 2017 to Long Blockchain and saw its stock jump. In April, Nasdaq suspended the company's stock, and in June, finally delisted the beverage maker.
At that point, Long Blockchain may have wished it had never rebranded so it could go back to providing picnic beverages. But things have gotten worse. According to company filings to the Securities and Exchange Commission (SEC) dated July 26, the SEC issued the corporation with a subpoena on July 10. Long Blockchain's disclosure states:
"The Company is fully cooperating with the SEC's investigation. 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."
Those wondering why the company has been subpoenaed may look to SEC chair Jay Clayton's January remarks to the Securities Regulation Institute, in which he stated:
"I doubt anyone in this audience thinks it would be acceptable for a public company with no meaningful track record in pursuing the commercialization of distributed ledger or blockchain technology to (1) start to dabble in blockchain activities, (2) change its name to something like 'Blockchain-R-Us,' and (3) immediately offer securities, without providing adequate disclosure to Main Street investors about those changes and the risks involved."
It may not be the end for Long Blockchain. Last year, veterinary patent firm Bioptix changed its name to Riot Blockchain and moved into the blockchain space. It was likewise slapped with an SEC subpoena in April for its efforts, but is still trading on Nasdaq.