The US Securities and Exchange Commission (SEC) revoked Long Blockchain’s registration on the exchange, thereby effectively banning it from working on the stock market. The company’s shares were banned from transactions, and the unenviable fate awaits it itself to replenish the list of failed blockchain startups. However, there is nothing surprising in this, moreover, yesterday’s iced tea traders initially risked to go exactly to such a result.
The history of Long Blockchain began in 2017 with the unexpected decision of the management of the Long Island Iced Tea Company (which was previously engaged in the sale of iced tea drinks) to change its name and operational strategy. The main prerequisite was the triumphant rise in the bitcoin rate, the price of which soared to $ 20,000 overnight. The blockchain and related myths excited the minds of businessmen, promised large profits with minimal investment, so yesterday’s drink traders could not resist the temptation and decided to move into the cryptocurrency mining field.
It should be noted that success awaited the company at the start – the very fact of renaming and moving to the blockchain segment tripled the price of its securities. Alas, then the management made a number of mistakes. Firstly, the announced strategy was clearly speculative in nature, representatives of Long Blockchain said that they would study the blockchain in order to understand how to make money on it. Secondly, no one in the company owned the technology itself, which is not surprising for people from the tea business. Finally, thirdly, the company never purchased mining equipment or hired specialists in this field, although it promised to do so.
The first to react were NASDAQ regulators – Long Blockchain was accused of foul play and kicked out of the exchange. The officials then demanded to provide financial statements, which have not been kept since 2018. As a result, the US Securities and Exchange Commission recognized that Long Blockchain does not conduct blockchain business as such, and therefore loses registration. Fortunately for the would-be businessmen themselves, they did not quit their main activity and can now safely return to the iced tea trade. Journey to the world of blockchain it’s finished.