SEC Probe on Biotech Company-Turned-Crypto ‘Still Ongoing’

The SEC is specifically interested in the information contained in three registration statements.

Riot Blockchain (Nasdaq: RIOT), formerly a biotech company that saw its share price skyrocket when it refocused on cryptocurrencies, said the US regulators’ investigations in its alleged “pump-and-dump” scheme are “still ongoing.”

Riot first revealed in April that the SEC had sent it a subpoena for information. The SEC is specifically interested in the information contained in three registration statements. However, the company announced in October it has “withdrew one registration statement and its amended version in question and terminated the other.”

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Although its rebranding might seem like a minor thing, the change caused the company’s share price to jump from under $5 to near $50 in a matter of days. The company’s blockchain involvement has also drawn scrutiny from the Securities and Exchange Commission.

According to Riot Blockchain’s latest quarterly regulatory filing, the company is engaged in conversations with the staff of the SEC about their concerns and intends to cooperate fully with the examination.

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Bleak Business Highlights

Riot reported $2.8 million of revenue and a net loss of $24.4 million for the second quarter. In the January-March quarter, the former biotech company, which entered the cryptocurrency business in October 2017, brought in less than $1 million in revenue, according to its filing in May.

The company had $1.6 million in cash as of September 30, down from $1.7 million at the end of the second quarter, and from $41.7 million in December, according to the two most recent quarterly filings.

This is not the first time a blockchain-related company got in trouble due to a foray into the cryptocurrency-inspired technology.

Last year, the US securities watchdog also suspended another company tied distantly to the cryptocurrency industry after temporarily halting trading in shares of CIAO Group, citing concerns over the Nevada technology company’s planned initial coin offering (ICO).

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