Latest Long Island Iced Tea News

The FBI is investigating reports of insider trading and securities fraud in connection with the company formerly known as Long Island Iced Tea Corp, following its decision to switch focus to SegWitCoin (BTC) in 2017, Quartz first reported. At the peak of the bubble in December 2017, Long Island Iced Tea Corp. announced it had rebranded as “Long Blockchain,” reflecting its decision to focus its business entirely on the BTC speculation at the time. The news caused stocks to soar by as much as 300%, after the company said it was “shifting its primary corporate focus” to cryptocurrency. However, things didn’t pan out as planned for the company, which was subsequently delisted from the Nasdaq exchange, and then investigated by two separate regulators in the United States. Now the FBI is on the case. A request for a search warrant revealed that the FBI is investigating alleged offences in connection with insider trading and securities fraud, suggesting the company could have become the victim of a sophisticated “pump and dump” scam. These schemes are pulled by investors who snap up a cheap stock, make outlandish claims about its prospects to push the share price, and sell at the peak of the frenzy, often netting themselves millions in the process. Joshua White, assistant professor of finance at Vanderbilt University, said the BTC bubble would be naturally attractive to scammers. He explained, “Anytime there’s a new technology like blockchain, and there’s any kind of mania around it, this is what the fraudsters take advantage of.” The FBI investigation crosses paths with ongoing investigations by the U.S. Securities and Exchange Commission (SEC), which have resulted in the arrests of several individuals in connection with the case. According to analysis published in Quartz, the scam may have been more successful than the fraudsters initially intended, courting the scrutiny of regulators and, now, the FBI. The case highlights the type of scams still being conducted in and around BTC. Fortunately in this case, the authorities appear to have identified the irregularities, thanks to evidence obtained in part from a hacked iPhone belonging to company insiders.