Crypto company Riot Blockchain’s regulatory woes are far from over.
On Tuesday, Riot said it has received a letter from the U.S. Securities and Exchange Commission (SEC) last July 30, noting that the securities regulator had begun looking into a number of Riot’s registration statements as well as its purchase of a minority stake in Canadian cryptocurrency exchange Coinsquare.
According to the letter, SEC are conducting the investigation as it has reason to believe Riot did not comply with Section 8(e) of the Securities Act of 1933, which states that: “If it appears to the Commission at any time that the registration statement includes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, the Commission may… issue a stop order suspending the effectiveness of the registration statement.”
SEC stated that the company had earlier given misleading information, which means that no shares can be traded until any misleading information is corrected. In light of the new information, investors attempted to call the Riot’s CEO, John O’Rourke. However, their calls were not immediately answered.
In April, Riot revealed that the securities regulator sent a subpoena, saying that the company is facing possible removal from the NASDAQ for not adhering to policies. Several months later, Riot said it is still in talks with the staff of the Division of Enforcement, Division of Investment Management and Division of Corporation Finance, noting that the company “intends to cooperate fully with the examination.”
Riot Blockchain jumped from biotech to blockchain in 2017, resulting in its stocks jumping. However, the company said it has suffered losses following the SEC investigations. Riot said it has $28 million in total assets, as well as an equivalent amount in liabilities and stockholders’ equity, as of June 2018, down from more than $52 million reported at the end of 2017.
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