US companies who change their name to include the word ‘Blockchain’ could soon face increased scrutiny from regulators, new comments released Monday, Jan. 22. from the US Securities and Exchange Commission (SEC) suggest.

Speaking at the Securities Regulation Institute Monday, SEC Chairman Jay Clayton devoted a small but pointed portion of his remarks to Blockchain technology. Specifically, Clayton addressed the growing phenomenon of companies adding the word ‘Blockchain’ to their names to “capitalize on the perceive promise” of doing so.

Cointelegraph previously reported on several businesses in the US and elsewhere changing their names so that the word ‘Blockchain’ featured in their official titles. The effect of this has been to dramatically increase the value of those businesses’ stock, allowing short-term profiteering and increased publicity.

In one case, involving a drinks company previously known as Long Island Iced Tea Corp., a name swap to ‘Long Island Blockchain Corp.’ raised the company’s stock prices enough to prevent it from being dropped from Nasdaq.

For the most part, however, it remains dubious how companies incorporating ‘Blockchain’ into their names actually interact with the technology, and to what extent they abide by best practices in doing so. Clayton described the situation, saying:

“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.”

This week saw UK-based telecoms acquisitions outfit Stapleton Capital jump on the bandwagon to become ‘Blockchain Worldwide,’ benefitting from a short-lived 130% stock increase which smoothed out to 45% the same day, Jan. 22.

For copycats, it appears, the SEC will soon weigh in to ensure such moves are above board. Clayton closed his Monday remarks on Blockchain saying: