Eric Watson has been charged with insider trading in the US after shares were traded in a drinks company before it switched to blockchain technology, sending its share price soaring.
Watson, a former convict and New Zealand rich-lister, drove - despite being an undisclosed control person of the company - the change of Long Island Ice Tea Corp's rebranding to Long Blockchain Corp, according to a United States' Securities and Exchange Commission statement reported by Bloomberg News.
Watson tipped off his friend and broker, Oliver Barret-Lindsay, who then told his friend, Gannon Giguiere, who made more than $160,000 (NZ $229,000) in illegal profits, the commission said.
Long Blockchain jumped more than 380 per cent intraday in December 2017 after the company issued a press release announcing its new name.
The company was among a number of obscure micro-cap companies which embraced 2017's massive Bitcoin rally by announcing new business ventures focused on cryptocurrencies, Bloomberg News reported.