The Chairman of the Securities and Exchange Commission, Jay Clayton, put the heat on some companies in one of his speeches at the Securities Regulation Institute. He was directing his comments towards companies that are looking to get a boost from the blockchain buzz. Apparently, several companies- some rather well known- have been giving blatantly deceptive cues that they will somehow be involved with blockchain technology and development. It’s time to be careful out there in the blockchain jungle.
One notable example would be Long Island Iced Tea. They recently changed their name to Long Blockchain Inc. and got a 500% increase in their stock valuation. Whether they were making a statement on their position or indicating that they were involved in blockchain development wasn’t forthcoming. Another more recognizable name to have attempted to benefit from the hype surrounding the new technology was the Kodak company. They announced that they would have an ICO and saw their stock triple in relation to the announcement. You can read more about this story on an article by Fitz Tepper for TechCrunch.
These changes are obviously aimed to deceive the uninformed investor into making untimely investments into companies they perceive are related to blockchain technologies. For what it’s worth, I’ve even experienced the same kind of ignorance coming from financial advisors, financial consultants and even an errant market fund manager. One such individual asked me to list the top three blockchain companies for him rather than educating himself on the legitimate offerings out there to date. That kind of lazy investing of other people’s money will end your career.
Word to the wise: if you find yourself looking to make a quick buck investing in the blockchain labs or cryptocurrency markets take your time and do your research. Fear of missing out cause you to make a hasty decision. Remember the old adage, “a fool and his money are quickly parted”.