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SEC Subpoenas Another Firm Following Claimed Blockchain Pivot

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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Nasdaq to Delist Long Blockchain After Appeal Fails

The stock for Long Blockchain, the price of which soared in December after the company changed its name from Long Island Iced Tea, will be delisted by Nasdaq on Thursday.

The firm, which trades under the ticker LBCC, announced the exchange’s decision on Tuesday, sending the stock price down more than 37.14% to about $1.10 as of press time. That represents a notable change of fortune, considering that the price nearly hit $10 after its publicly announced pivot toward cryptocurrency and blockchain services.

Long Blockchain warned back in February that it planned to appeal a decision to delist the stock, a process that ultimately proved unsuccessful, according to new statements:

The company said on April 10:

“The Company appealed this determination and a hearing was held on March 22, 2018. Following this appeal, the Hearings Panel determined to uphold the Staff’s decision. Accordingly, trading of the Company’s shares will be suspended on the Nasdaq Capital Market at the opening of business on April 12, 2018.”

Long Blockchain did not respond to requests for comment.

Road to delisting

In February, Long Blockchain revealed that it was at risk of being delisted – the second such occurrence for the firm, given that it faced similar warnings from Nasdaq in October. Nasdaq’s rules require that a listed company’s market capitalization remain above $35 million for ten business days in a row – as of press time, LBCC’s market capitalization is roughly $11.24 million.

Subsequent disclosures revealed that Nasdaq staffers believed Long Blockchain wasn’t being forthright with investors – a determination the company sharply disputed in the same letter, published in February. However, the company’s plan to appeal the de

“The notification letter stated that the staff believed that the Company made a series of public statements designed to mislead investors and to take advantage of general investor interest in bitcoin and blockchain technology, thereby raising concerns about the company’s suitability for exchange listing,” the company said at the time. “The company strongly disagrees with the staff’s determination and, accordingly, has appealed to a Hearings Panel.”

According to Tuesday’s statement, Long Blockchain sad it plans to continue pressing ahead with its plans, including a previously announced acquisition of a U.K.-based company.

“Effective April 12, 2018, the Company’s common stock will be eligible for trading and quotation on the Pink Current Information tier operated by the OTC Markets Group Inc.,” the company added.

Chart image via Shutterstock.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Nasdaq Believes Publicly-Traded Long Blockchain Misled Investors

Long Blockchain is appealing a delisting decision from stock exchange operator Nasdaq which, according to a letter, believes the publicly-traded company misled its investors.

In a Feb. 21 letter, Long Blockchain – one of a number of firms with public securities to ride the recent wave of investor hype around blockchain – wrote that Nasdaq ” had determined to delist the Company’s securities.” The reason: Nasdaq, according to the note, is crying foul in light of recent statements issued by the company.

“The notification letter stated that the Staff believed that the Company made a series of public statements designed to mislead investors and to take advantage of general investor interest in bitcoin and blockchain technology, thereby raising concerns about the Company’s suitability for exchange listing,” the firm wrote, going on to add:

“The Company strongly disagrees with the Staff’s determination and, accordingly, has appealed to a Hearings Panel. As a result, the Staff’s notification has no effect at this time on the listing of the Company’s common stock, and the stock will continue to trade uninterrupted under the symbol ‘LBCC.'”

However, the company remains out of compliance with Nasdaq’s rules for market value requirements, and so even if it wins the appeal, it runs the risk of being delisted anyway, as previously reported.

To maintain its listing, Long Blockchain’s market cap must remain at or above $35 million for at least 10 consecutive business days, though a note on the most recent SEC filing states that Nasdaq can extend this time period up to 20 consecutive business days. The company has until April 9 to maintain this level.

As of press time, Long Blockchain’s market cap remained around $31.6 million, according to data from Nasdaq, down some $2 million from earlier in the week. At its height, the price of the company’s stock rose to nearly $7 – as of today, it’s hovering around $3.

The public filing comes just days after the company announced Shamyl Malik, a board member, was taking over as the company’s chief executive after former CEO Philip Thomas stepped down.

Stock chart image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Long Blockchain Is At Risk for Exchange Removal Again

Long Blockchain, the beverage company-turned-crypto-firm, is facing a delisting from the Nasdaq stock exchange, public records show.

The reason lies in Long Blockchain’s sliding stock price, which rose to nearly $7 in December after a strong market response following its crypto-pivot. Now trading below $4, the company’s press-time market capitalization of $33.01 million (per data from Google) means that it runs afoul of Nasdaq’s rules requiring that a listed firm’s  market capitalization remain above $35 million for ten business days in a row.

In a filing with the U.S. Securities and Exchange Commission (SEC) dated Feb. 15, Long Blockchain announced it would appeal the move by Feb. 22. If it is successful, the company has until April 9 to maintain a market value of $35 million.

“On February 15, 2018, Long Blockchain Corp. (the “Company“) received a notice from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq“) stating that Nasdaq had determined to delist the Company’s securities under the discretionary authority granted to Nasdaq pursuant to Nasdaq Rule 5101,” the firm wrote.

How that process will play out remains to be seen.

The company had already been warned of a possible delisting in October, a move that came just over two months prior to announcing its pivot and accompanying name change.

In the time since the shift toward blockchain, the company has announced and canceled a plan to purchase 1,000 bitcoin miners. In order to fund its purchase, the company also announced a stock sale to raise $4.2 million over a nearly four-week period. This sale was called off a week later, but it remains unclear how much the company raised.

Stock market chart image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Ex-Iced Tea Maker Long Blockchain Is Buying a Bunch of Bitcoin Miners Now

Long Blockchain Corp. the former beverage company that announced a pivot to blockchain technology last month, is now planning to enter the bitcoin mining business, a new filing shows.

According to a filing with the Securities Exchange Commission on Jan. 5, Long Blockchain Corp, the publicly traded company that was rebranded from Long Island Iced Tea, is in the process of purchasing 1,000 units of AntMiner S9 manufactured by the China-based Bitmain.

This move came just weeks after the firm announced its business pivot, which caused its stock price at the U.S. exchange NASDAQ to surge nearly 200 percent. Similar trends in market euphoria were also seen for other public stocks that announced business strategy shifts to areas related to blockchain.

In a press release, Long Blockchain said the mining facilities would be located in a Nordic country, without specifying which one. But the agreement included in the SEC filing includes a hint: It states that the vendor will notify the purchaser when the products arrive in Iceland.

Further, the purchase price will be $4.2 million, which includes $2.9 million cash as well as an issuance of 260,000 shares of Long Blockchain’s common stock. It is not clear from the filing whether Long Blockchain is buying the equipment directly from Bitmain or from a third party.

According to the document, this purchase is scheduled to close by Jan. 31 only if Long Blockchain Corp. is able to obtain the required financing before that.

As such, Long Blockchain announced in the same document it is issuing additional 1.6 million shares of common stock at a public offering price of $5.25 per share, aiming to raise approximately $7.7 million in net proceeds.

Philip Thomas, CEO of Long Blockchain Corp. said in the announcement:

“We view this transaction as an important and validating initial step in the Company’s progression into blockchain technology. The commencement of our mining operations places us on a path to generating blockchain-related revenue through the accumulation of bitcoin.”

Mining chip image via CoinDesk’s archive.

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.