Listed Company that Changed name to ‘Long Blockchain’ Suspected of Insider Trading

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Blockchain was probably the most overused buzzword in 2017 for economic and technology enthusiasts. Many companies like Long Island Iced Tea and Bioptix changed their names and their core business just to get in on the hype. A new FBI investigation revealed the cold-beverage company may have done this on the premise of insider trading, as reported by Quartz, July 25, 2019.

Publicly Listed Sham

For all the grief given to the private market of initial coin offerings (ICOs) and initial exchange offerings (IEOs), regulators seem to have their own share of incidents in their beloved public markets.

Riot Blockchain was a biotech company that changed its entire business just to accommodate their desire to enter the blockchain space. They acquired Coinsquare and have continued to strengthen this new business model.

Long Island Iced Tea produces ready to drink iced tea and lemonade. The addition of blockchain to their name without a fundamental change to their business model is enough to suspect something fishy. Shares of the company pumped upon the name change and the U.S Securities and Exchange Commission (SEC), issued a letter to them stating they would be delisted from NASDAQ.

Two men were arrested in the case and FBI agents found signs of insider trading and securities fraud, leading them to believe the name change was an elaborate scheme to pump the stock and make some quick money.

The FBI’s warrant describes encrypted messages found on the phone of one of the men that show confidential information about the company being discussed.

Despite no concrete evidence, the narrative does add up and the FBI has sufficient reason to believe that this is a case of securities fraud.

Under Their Nose

It’s taken two years for the FBI to properly investigate this, but American regulators want to jump on ICOs and Libra within days of announcement.

It’s quite ironic to see them tackle private market scams while things such as Long Blockchain happen right in front of their face.

There is a clear bias in the ways regulators are acting toward the cryptocurrency ecosystem, and for all the blabber of it being a private market, the networks and ledgers themselves are as public as anything can be.

This is the equivalent of pointing your finger at someone doing wrong without acknowledging your own shortcomings.

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