Blockchain BS is over at Nasdaq, for now

blockchain blowout

Blockchain BS is over at Nasdaq, for now

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Two infamous blockchain-pivot companies face delisting from Nasdaq after going afoul of various stock exchange guidelines and some questionable business and promotional practices.

 

blockchain blowoutShares of Long Blockchain Corp and Longfin Corp jumped late last year as the two companies and others used the cryptocurrency frenzy and blockchain buzz to pump up their share value by pivoting their business focus to blockchain technology.

 

Like many pump and dump schemes, the tactic seemed to work for few weeks while the markets digested whether the companies could operate successfully in the challenging business of blockchain technology.

 

The market verdict seems to be that both companies have failed to convince investors and Nasdaq that there blockchain business is legitimate.

 

Of course, there’s also the matter of being under investigation by US regulators.

 

Long Blockchain tea party tanks

 

Long Blockchain CorpLong Blockchain was just one of the improbable attempts to drive up share value on the coattails of blockchain technology. Originally an unprofitable distributor of iced tea beverages from its Long Island, New York operation, the company was facing delisting from Nasdaq in December when it pivoted to embrace blockchain as its business focus.

 

According to Bloomberg:

“In February, the exchange sent it a delisting notice, alleging that the Farmingdale, New York-based company “made a series of public statements designed to mislead investors and to take advantage of general investor interest in Bitcoin and blockchain technology.”

 

The company said it will be suspended today (April 12) under a rule that gives the stock exchange the power to delist companies for misconduct.

 

Longfin languishes under investigation

 

Longfin CorpLongfin Corp is under investigation by SEC regulators and it also received a Nasdaq noncompliance letter for failing to fire its quarterly report on time. These kind of deadline failures happen often with listed companies and the stock exchange only uses it when it really wants to get rid of problem companies on its exchange.

 

The SEC investigation is a whole other kettle of blockchain Bass.

 

ZidduThe SEC froze $27 million of assets of Longfin shares last week while it investigates possible illegal insider trading. According to Bloomberg, Longfin’s purchase of Ziddu.com is also under investigation. Ziddu was described as “a blockchain-empowered solutions provider that offers microfinance lending against collateralized warehouse receipts in the form of Ziddu Coins.”

 

The company’s accountants have also resigned according to a filing over “material weaknesses in internal control over financial reporting” with Longfin.

 

Regulations can’t come soon enough

 

So, two of the blockchain bad actors on Nasdaq are in trouble. As usual, it’s the unwitting investors and shareholders who will carry the blockchain baggage as a result.

 

Stricter regulation of ICOs and companies tailgating on trends to pump and dump cryptocurrency and blockchain investments can’t come soon enough.

 

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