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Crypto Exchange Launch Shows Riot Blockchain Still Clings to the Bitcoin Dream

Last Updated March 4, 2021 3:20 PM
Samantha Chang
Last Updated March 4, 2021 3:20 PM

Riot Blockchain, a former biotech firm turned bitcoin-mining company, expects to launch a regulated cryptocurrency exchange by the end of the second quarter of 2019, or June 30. The company is initially investing up to $250,000 to make this roll-out happen.

Riot Blockchain made the revelations in a March 14 filing  with the Securities and Exchange Commission. The company formed a subsidiary called RiotX Holdings to operate the exchange, which has partnered with software provider Shift Markets.

Once the RiotX exchange goes live, its 2019 operational budget is expected to approach $2 million.

RiotX Crypto Exchange to Go Online in All 50 U.S. States

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Riot Blockchain hopes to open its crypto exchange to customers in all 50 U.S. states. | Source: Shutterstock

To meet its June 30 deadline, Riot Blockchain plans to hire new employees and refine its compliance procedures to make sure it meets regulatory guidelines.

The Colorado-based company also has an ambitious plan to bring RiotX online in “all 50 states except Hawaii and Wyoming by the end of 2019.”

Riot Blockchain believes this timeline “is achievable,” but warned that there might be delays due to regulatory issues and capital restrictions.

Currently, RiotX is licensed and/or approved in five states and has pending licenses in another 17 states, the company said. In its SEC filing, the company warned that RiotX is a risky investment.

“If the Company is unsuccessful in the deployment of RiotX, it may lose most or all of the capital it has invested into the exchange.”

Riot Hopped on Bitcoin Bandwagon in 2017

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Riot Blockchain was one of several investment firms that made dubious pivots to the crypto space in late 2017. | Source: Shutterstock

Riot Blockchain has teased launching a cryptocurrency exchange since March 2018. As CCN.com reported, the bitcoin-mining company was previously a biotech firm called Bioptix until October 2017. At the time, Bioptix was a manufacturer of diagnostic machinery for the biotech industry.

At the height of the bitcoin bull market in 2017 (when the bitcoin price approached a record $20,000), Bioptix joined several other companies that hopped on the bitcoin bandwagon and transitioned into a bitcoin-mining business.

In April 2018, Riot Blockchain said it had been subpoenaed by the Securities and Exchange Commission amid suspicions about its sudden pivot into the cryptocurrency space.

In the same April 2018 SEC filing , Riot Blockchain revealed that it was facing delisting from the Nasdaq for failing to hold its annual shareholders meeting promptly. However, the company remains on the Nasdaq in good standing, presumably after fixing its outstanding issues.

In September 2018, Riot’s CEO John O’Rourke resigned after being named in an SEC lawsuit alleging that he and nine other corporate executives had conspired to orchestrate “pump-and-dump” schemes to defraud investors. However, Riot Blockchain was not named as a defendant in that SEC lawsuit.