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A Long Island Iced Tea is a popular cocktail made with vodka, tequila, light rum, triple sec, gin, and a splash of cola. Interestingly, despite its name, it does not actually contain any tea.

However, to those people with even a passing interest in the cryptocurrency world, the words ‘Long Island Iced Tea’ no longer conjure up thoughts of a fashionable party drink, but a company called Long Island Iced Tea Corp that raised its share value by almost 300 percent by changing its name to Long Blockchain Corp. Interestingly, despite its name, Long Blockchain Corp does not actually contain any blockchain (or at least it didn’t initially). It has now been informed by Nasdaq that its securities are going to be de-listed.

Long Blockchain is far from the first company to take advantage of the cryptocurrency hype, and indeed other hypes before it, and we have written about this trend before. But there is now a new development on the subject – regulatory organisations are starting to take note of this dishonest pumping tactic.

South Korean news sources have reported that the South Korean Financial Supervisory Service has begun an investigation into 20 different companies for exactly this reason.

The watchdog has not released the names of the companies so as to avoid stock market instability, which would be counter-productive to its purpose in investigating them.

It should be noted that becoming more popular due to an honest change in business direction is not in itself a crime, and examples abound. Take for example India Globalization Capital, best-known for cannabis-based pharmaceuticals, which saw its share price jump by 135 percent when it began using blockchain technology.

Or mobile payment processing company Square, whose stock rose by 22 percent when it announced that it was allowing some customers to use its app to test a new Bitcoin trading facility.

But such is the hype that the simple act of changing a company’s name to include something crypto-esque seems to be making investors throw their wallets into the air in uncontrolled excitement. In October 2017, the value of British internet firm On-line Plc jumped 394 percent after it announced that it was changing its name to On-line Blockchain Plc. The change was justified by a very vague company statement, in which it failed to mention any specific products.

The South Korean financial regulator stated that many companies had been found to have undergone rebranding efforts which were more cosmetic than representative of a new business direction, and the agency has committed to monitor and sanction such behaviour, according to Bitcoin.com.

“We will conduct a full-scale investigation into the presence of unfair exchange practices among the 20 related stocks surveyed and plan to increase the number of such surveys in the future,” said Lee Seung-woo, former vice-chairman of the FSS.

Another example of a name change causing trouble is the story of Riot Blockchain, formerly known as Bioptix, which is now facing a class action lawsuit. We wrote about this story from the angle of a famous Wall Street analyst, who had once called Bitcoin “nonsense”, losing money because he had invested in this firm, to the great amusement of the cryptocurrency community and the great embarrassment of himself.

But the saga is continuing, according to a report in Bitcoin.com. According to the details of the class action suit filed by law firm Robbins Geller, Riot Blockchain began representing itself as a blockchain technology company on the 4th of October 2017 specifically to “generate investor enthusiasm and tie the Company to the recent rise in the price of cryptocurrencies despite its lack of a significant blockchain business in order to further an insider scheme that would allow Riot’s controlling shareholder Barry Honig and his associates to sell their Riot securities at artificially inflated prices.”

A CNBC exposé published on the 16th of February 2018 revealed that Riot Blockchain insiders sold shares at times that coincided with increases in Riot’s stock price. This news caused the stock price to fall by 33%, and angry investors are now looking to get their money back.

Jay Clayton, Chairman of the SEC, warned about this phenomenon back in January, as reported by Techcrunch. During a recent senate hearing on the subject of cryptocurrency he didn’t exactly impress the world with his understanding of the field (as opposed to his counterpart at the CFTC), but his warning on this subject, delivered at a speech to the Securities Regulation Institute, was fairly on point:

“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…”

He assured the listeners that the SEC, much like its aforementioned South Korean counterpart, will be keeping a close eye on such cases from now on.

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