Feds investigate blockchain venture for insider trading

The FBI is looking into insider trading allegations against Long Island Tea Corp., according to a search warrant released July 25 and cited by TNW.

Long Island Tea is accused of adding the word "blockchain" to its name in order to raise millions in capital.

In December 2017, the beverage company changed its name to Long Blockchain Corp. This caused the company's share value to spike from under $5 million to close to $70 million.

The FBI claims that while Long Island Tea changed its name to include blockchain, the company made no efforts to create a decentralized ledger. Subsequently, the company was delisted from the Nasdaq Stock Market.

Along with the FBI investigation, Long Island Tea was served a subpoena from the Securities and Exchange Commission, reports TNW. The SEC is seeking more information on the company's name change from "tea" to "blockchain."

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