SEC Subpoenas Another Firm Following Claimed Blockchain Pivot

Long Blockchain, which made headlines last year when its stock surged following a blockchain pivot, has been subpoenaed by the SEC in the U.S.

Aug 2, 2018 at 4:00 p.m. UTC
Updated Sep 13, 2021 at 8:14 a.m. UTC

Long Blockchain, the beverage maker that made headlines last year when its stock surged following a pivot to blockchain and a related name-change, has been subpoenaed by the U.S. Securities and Exchange Commission (SEC).

An 8-K form submitted by Long Blockchain to the SEC on July 26 and revealed on Wednesday shows that the firm received the subpoena on July 10, with the SEC "seeking the production of certain documents." Long Blockchain said it is "fully cooperating with the SEC's investigation."

The firm did not disclosed details of the documents being sought by the regulator.

The subpoena comes four months after Long Blockchain was delisted from the Nasdaq stock exchange after losing an appeal over the decision and a resultant drop in the value of its stock.

In February, Long Blockchain (which was called Long Island Iced Tea before the pivot) warned that it was facing the risk of being delisted since the SEC believed the firm "made a series of public statements designed to mislead investors and to take advantage of general investor interest in bitcoin and blockchain technology."

This is not the first time the SEC has probed into firms that saw soaring stock prices following claims of blockchain interest.

As previously reported by CoinDesk in April, the SEC also subpoenaed Riot Blockchain after it drew public attention in a similar fashion late last year. The company also faces being delisted from Nasdaq.

The investigations are part of the U.S. regulator's wider effort to scrutinize public companies over whether their business claims are genuine or intended to capitalize on hype around tech like blockchain.

The SECs chairman, Jay Clayton, said in January: "The SEC is looking closely at the disclosures of public companies that shift their business models to capitalize on the perceived promise of distributed ledger technology."

SEC image via CoinDesk/Michael del Castillo

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