FBI investigating whether Long Island Iced Tea spiked its penny stock with blockchain hype

The FBI is probing Long Island Iced Tea’s infamous pivot to blockchain in 2017, searching for evidence of insider trading and securities fraud. 

The beverage company made an unexpected shift to blockchain during 2017 bitcoin bull run and witnessed a staggering 300% surge in stock price. The FBI now suspects that the company’s move to blockchain and corresponding price spike were parts of a scheme to manipulate the market and allow the conspirators to profit. 

According to Quartz, the FBI is also looking for evidence related to a potential “pump-and-dump” scheme involving Long Island Iced Tea stock. If the allegation is true, the promoters of the stock would have bought it cheap at around $2 ahead of the company’s announcement that it was shifting to blockchain, and sold it after the price climbed. 


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

As revealed in a search warrant request, the FBI found that a person named Gannon Giguiere, believed to be directly involved with the potential price manipulation, purchased a large sum of Long Island Iced Tea shares immediately before the company’s blockchain announcement.

Giguiere and his wife then unlocked all the shares after the price blew up, selling at an average price of $7 per share, an approximately 250% return. However, the company was soon delisted from the Nasdaq stock market after its blockchain shift. 

In the search warrant request, the FBI cites heavily a string of conversations between Giguiere and another individual, Oliver Lindsay, as evidence of potential insider trading and securities fraud. Since much of their alleged conversations were conducted on WhatsApp, the federal agency is asking permission to search the pair's phones for further electronic communication evidence.

About Author

Celia joined The Block as a reporter after earning her BA in the History of Science from the University of Chicago. Having spent years pondering over why 2+2 cannot equal 5, she is interested in the history and philosophy of mathematics, computation, and cryptography. She also had a very brief stint at Crunchbase News.