Iced Tea Company That Pivoted to Blockchain Has Its Licence Pulled by the SEC

Iced Tea Company That Pivoted to Blockchain Has Its Licence Pulled by the SEC
Image: Long Island Ice Tea Corp (Gizmodo)

I’ve got that deja vu feeling. In 2017, the price of bitcoin exploded, prompting a bunch of random companies to announce their business was pivoting to “blockchain” in some form or another before being forgotten when the mania subsided. Three years later, we’re seeing bitcoin’s price fall from another record high and Long Blockchain Corp is back in the news.

The Long Island Ice Tea Corp’s decision to change its name and suggest it would be diversifying its business with vague plans to invest in the technology underlying cryptocurrency had the immediate benefit of tripling its stock price. But by 2018, it found itself under scrutiny from the Securities and Exchange Commission. The tea-slingers quickly decided that promoting “globally scalable blockchain technology solutions” wasn’t for them, and the company was kicked off the Nasdaq exchange.

Now, the saga has come to an inevitable end. Late last week, the SEC revoked Long Blockchain Corp’s stock registration in a settlement deal that kills any dreams you may have had of owning public shares in the venture. As Ars Technica points out, the iced tea portion of the business operated as a subsidiary and is still operational.

We’re sure that the company’s bosses will be happy to put all this behind them, but it has to sting that the pivot to blockchain might have been a really smart move in 2017. At one point, Long Blockchain agreed to buy 1,000 Antminer rigs for mining cryptocurrency. Bitcoin is created by having a computer solve increasingly complex equations.

The person who solves the equation gets the new bitcoin. One day, all 21 million bitcoins will have been mined and that’s it, no more mining. But as the earlier bitcoin bubble burst and prices fell, the profitability of mining the cryptocurrency dropped along with it. Running a mining rig takes a lot of energy and processing power to do right and for a time, it was an open question if mining was worth the effort for anyone but the biggest players. Long Blockchain cancelled its mining rig order and returned its focus to tea.

But if the company had just hung in there for the 2020 boom, it would’ve seen the price of bitcoin jump from $US7,000 ($8,852) to $US54,000 ($68,283). That’s a lot of tea, fam.

What’s the moral of the story? Hodl, I guess.