Shifting to crypto cash, NY iced tea maker sees shares triple

Photo: AFP

Shares in a New York beverage company nearly tripled by midafternoon Thursday after it announced it was shifting into cryptocurrency-related investments.

Long Island Iced Tea Corp of Farmingdale, New York - which says it currently produces the soft drink with a proprietary recipe - announced Thursday it was changing its name to "Long Blockchain Corp" and would explore investments in the technology underlying cryptocurrencies like bitcoin.

Shares in the company were up 180 percent to $6.83 in afternoon trading on the tech-dominated Nasdaq.

Interest in cryptocurrencies, which are unregulated by any central bank, caught fire this year. Bitcoin's value skyrocketed well over 1,000 percent ahead of this month's debut of futures trading on a major market.

Regulators have warned that retail investors could fall victim to fraudulent or unscrupulous schemes riding the wave of public interest in the new phenomenon.

Representatives of Long Island Ice Tea Corp did not immediately respond to an AFP request for comment.

Soaring shares, and warnings

But the company said in a statement it would remain in the ready-to-drink beverage industry through a subsidiary while shifting to the cryptocurrency sphere.

The company is in "the preliminary stages" of examining investment opportunities in software and technology solutions to serve financial markets and the financial services industry as well as a "new smart contract platform," it said.

A blockchain is public ledger secured using cryptography that enables digital currency transactions.

This is not the first company to make the drastic move into the digital currency world.

In October, shares in the penny-stock biotech company Bioptix Inc soared when it changed its name to Riot Blockchain Inc and announced it would focus on cryptocurrency investments.

Shares in the financial tech company LongFin Corp also surged this month after it announced it had acquired the blockchain business Ziddu.com, according to Bloomberg.

In an unrelated statement on Thursday, the US Financial Industry Regulatory Authority, a private industry body with regulatory power, warned about potential scams given the explosion of interest in bitcoin.

"But it is important to do your research. Even when legitimate companies enter a hot, new sector, con artists almost always follow suit," Gerri Walsh, FINRA's senior vice president for investor education, said in the statement.

And the Securities and Exchange Commission has recently stepped up enforcement against cryptocurrency-related frauds.

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