It is believed Mr Tepania fell asleep soon after his challenge. Several hours later, emergency services were called to his Kaitaia home to treat a heart attack.
A St John spokesman said Mr Tepania was successfully resuscitated by ambulance and fire crews shortly after 3am on Sunday, and he was rushed to Kaitaia Hospital. "He was flown to Whangarei Hospital some time later," the spokesman said.
It is understood he died on Monday night. A grieving family member has since warned others taking part in the ice challenge to be sensible.
"If you're going to do the ice challenge, do it for the right reasons," he said.
"Alcohol has nothing to do with the ice challenge.
"Just basically think before you act, because one mistake and your life could be gone. All for what, a bottle of alcohol?
"Is that really worth it?"
It is understood the challenge and subsequent bourbon drinking were filmed, but that the footage has since been destroyed.
The family were holding a tangi for Mr Tepania at Oturu Marae, near Kaitaia.
It is expected the matter will be referred to the coroner.
Vicki Moses, who started an ice challenge to fundraise for her 5-year-old son Austin, also in Kaitaia, said drinking did not need to be part of it. The ice challenge had helped raise about $9000 for her son, who was diagnosed with leukemia in February, with more than 1000 people posting videos as far away as Europe.
She originally nominated just three people, she said.
"It went viral overnight, it went everywhere. The ice challenge has gone crazy."
A lot of videos were posted online with people downing alcohol immediately after the challenge and it appeared Mr Tepania had taken the challenge too far, she said.
"There needs to be some awareness there and not be silly. It's just a freak accident, but it happened. He made a bad decision ... My heart goes out to his family.
"I'm not promoting the alcohol in this. That's other people's choosing. It's a clean cause," she said.
The Cancer Society, which benefits from the ice challenge donations, has also warned against drinking.
"Cancer Society cares about your health and well being and so does not support the consumption of alcohol as part of this challenge," it says on one of its websites.
"If you decide to take on the ice challenge please remember to be safe and responsible."
Dr Leo Schep, toxicologist at the National Poisons Centre, said any extreme drinking of spirits was dangerous.
"You get the euphoric effects, that you go for, but then you get confusion, coma and, if there's huge amounts, death.
"You should moderate your alcohol consumption. Nobody is bullet proof, even the hardest drinkers will come unstuck at some level."
The global popularity of the ice challenge has reached local politics, too.
At midday today Mana Party candidate for Ikaroa Rawhiti, Te Hamua Nikora, has advertised that he will take the challenge at Kaiti Mall in Gisborne.
A survivor of testicular and brain cancer, Mr Nikora was "hoping to raise a really solid koha for the Cancer Society", he said.
"Our whanau need us to stay healthy for them."
Following his challenge he would be drinking a locally-produced tonic water, he said. additional reporting Jessica Tyson.
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