August 2nd, 2018: The company once known for focusing on beverages and formerly known as Long Island Iced Tea (now Long Blockchain Corp., LLC), is once again in the spotlight after reports of a recent subpoena from the US Securities and Exchange Commission (SEC). Though news of the subpoena was disclosed just this week, the document was dated July 10th and Long Blockchain Corp. says that the Commission had “asked for certain documents” without disclosing any other information about the request from regulators.
In response to the disclosure, Bloomberg reports that Long Blockchain Corp. had this to say:
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.
This isn’t the first time Long Blockchain Corp. has been in the news for questions about its unique pivot and rebranding as a company. Initially created as a beverage company, the complete shift into the fintech space doesn’t make the most logical sense for most businesses. Because of that, the change in name and direction brought many questions with it. Though no other details about the SEC subpoena have been released, many remain critical of the name change and pivot, especially giving the timing it took place.
Long Island Iced Tea officially changed its name to Long Blockchain Corp. and goal to start investing in blockchain technology in December of 2017. As most in the cryptocurrency space are likely acutely aware, December of 2017 is the largest Bitcoin and cryptocurrency bull run the markets have ever seen thus far.
During the cryptocurrency bull run and the following so-called ‘crypto mania,’ Long Island Iced Tea made the strategic decision to repurpose their brand and push the company in a new direction. Being a publicly traded company, many investors like this new idea. Not only is there a lot of room for growth in the fintech space, but anything with “blockchain” in the name was incredibly popular at the time. That’s what regulators are most likely worried about.
Before the SEC got involved, Long Blockchain Corp. went through a delisting from NASDAQ on similar grounds based on their rebranding and company pivot. Because of the timing of the decision, the company experienced an unparalleled stock price surge. After the name change and pivot to be a crypto-facing company (at least in name at the minimum), the market value of Long Island Iced Tea, now Long Blockchain Corp., reached nearly $70 million. Today, Long Blockchain Corp. has a market value of under $5 million.