Crypto mining company Riot Blockchain has published its results for 2018, confirming a disappointing year with substantial operating losses.
Against the backdrop of ongoing U.S. Securities and Exchange Commission (SEC) investigations into the company, the firm reported losses of $58 million for the year according to the financial report released April 2.
The results are typical for firms in the mining sector over the last 12 months, with the collapse in Bitcoin Core (BTC) prices in particular undermining viability. As a result, a number of mining firms have laid off staff, closed mining facilities, and in some cases gone out of business, after posting record losses on their mining activity.
The firm, formerly in biotech, changed its name from Bioptix to Riot Blockchain in April 2018, reflecting a shift in focus towards crypto mining. This triggered an investigation by the U.S. securities regulator after the firm was served with a subpoena by the regulator, directly related to the name-change.
The company generated revenues of $7.7 million in 2018 from mining digital currencies, but was hit with charges totaling $45.2 million, which delivered much of the operating loss.
With no long-term debt, Riot Blockchain reported a gross margin of 33%. The report said that Riot Blockchain would continue to work with enforcement officials at the SEC in a bid to bring the regulator’s probe to a swift conclusion.
The figures also detail a $3 million bridging loan facility, backed by a syndicate of lenders, to provide additional liquidity support, particularly relevant in light of the year’s losses.
While some recent reports have suggested crypto mining could soon become profitable again, rising energy prices combined with ever-increasing hardware demands could see the sector mired in yet further difficulties in the months to come.
Despite the ongoing investigation and the dismal trading performance, Riot Blockchain still plans to bring forward it crypto exchange, RiotX, by the end of Q2 2019, with an application submitted before the SEC for consideration.
With such substantial losses on the year, the emphasis on the new crypto exchange product is an attempt to shore up the firm’s precarious position, and to protect against further pressures on the mining side of the business.
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