As far as the Securities and Exchange Commission is concerned, fake blockchain rebranding is the equivalent of fake news — and they’re not happy about. In fact, the SEC is so unhappy about it that it’s planning on cracking down on companies who change their names to something blockchain related in an effort to make a quick buck — especially when those companies have nothing to do with blockchain technology. (Investopedia)
The money quote
Speaking at the Securities Regulation Institute this week, SEC Chairman Jay Clayton spoke pointedly about the blockchain name phenomenon. “I doubt anyone in this audience thinks it would be acceptable for a public company with no meaningful track record in pursuing the commercialization of distributed ledger or blockchain technology to 1) start to dabble in blockchain activities, 2) change its name to something like ‘Blockchain-R-Us,’ and 3) immediately offer securities, without providing adequate disclosure to Main Street investors about those changes and the risks involved,” Clayton said, according to his prepared remarks. (Investopedia)
The bottom line: Plenty of companies have been doing this. Some apparent, like Long Island Iced Tea becoming Long Island Blockchain to avoid bankruptcy and some, not so apparent. The SEC cracking down on this behavior is a good thing for investors.