Crypto company's stock plunges on SEC probe

Many companies trying to ride the crypto wave are faring even worse than bitcoin itself.Riot Blockchain's stoc...

Posted: Apr 19, 2018 11:47 PM
Updated: Apr 19, 2018 11:47 PM

Many companies trying to ride the crypto wave are faring even worse than bitcoin itself.

Riot Blockchain's stock has plummeted 77% in 2018. (Bitcoin prices have plunged 40% in 2018.)

The bursting of the bitcoin bubble clearly is hurting Riot Blockchain. But news worsened when the company disclosed to investors Wednesday that it had received a subpoena from the Securities and Exchange Commission.

The stock has fallen more than 10% in just the past two days ... and the worst may not be over.

Riot Blockchain used to be called Bioptix. It made fertility hormones for cows, horses and pigs. And it still does.

But Bioptix changed its name to Riot Blockchain last October and said its new focus "will be as a strategic investor and operator in the blockchain ecosystem with a particular focus on the Bitcoin and Ethereum blockchains."

The stock surged from about $5 a share to a high of $46.20 by December. Then cryptocurrencies, including bitcoin, ethereum, ripple and litecoin, started sinking. It's been all downhill for Riot Blockchain ever since.

Related: SEC suspends trading of once red-hot bitcoin stock

The company said in an SEC filing it "believes that many companies engaged in blockchain and cryptocurrency businesses have received subpoenas from the SEC which presents an additional industry risk."

Riot Blockchain added "the existence of an investigation ... could have a materially adverse effect on the company, its business or operations, and the industry as a whole."

Making matters worse, Riot Blockchain disclosed that the Nasdaq has warned it will delist the company's stock if it fails to hold an annual shareholder meeting soon.

The company said it did not have a quorum of shareholders but hoped to be able do so at a reconvened meeting it plans to hold no later than the middle of next month. But Riot Blockchain said there were no assurances it could get a quorum this time either.

Riot Blockchain is hardly the only company guilty of trying to cash in on the crypto craze.

Eastman Kodak -- yes, the camera and film company -- launched its own KodakCoin.

LongFin, a financial tech firm that recently went public, and initially skyrocketed after announcing that it bought a blockchain microlender, has lost nearly half of its value this year.

A company called Long Blockchain, which used to be known as Long Island Iced Tea, has plunged nearly 90%.

And shares of a small company called Nodechain have dropped by more than 90% this year too. Nodechain got into the cryptocurrency mining business last December. Before that, it was a maker of electronic cigarettes called Vapetek.

That's one reason why the SEC and other regulators around the world are taking steps to crack down on fraud by companies seeking to take advantage of bitcoin mania, particularly those that are trying to raise money through initial coin offerings, or ICOs.

Related: Bitcoin plunges as social media cracks down on ICO ads

In an ICO, a company is selling digital currencies, as opposed to stock, to investors. But these sales are not regulated by the SEC as share offerings are in an initial public offering or IPO.

Regulators aren't the only ones growing more leery of cryptos though. Last month, Twitter banned ads for ICOs and token sales. Google also last month that it will begin restricting some crypto ads in June.

And Facebook announced in January it was prohibiting the sale of ads that "promote financial products and services that are frequently associated with misleading or deceptive promotional practices" -- which included ICOs and bitcoin.

So if the bitcoin bust continues, Riot Blockchain may find the business of helping get farm animals pregnant isn't so bad after all.

West Lafayette
Clear
34° wxIcon
Hi: 48° Lo: 32°
Feels Like: 34°
Kokomo
Clear
34° wxIcon
Hi: 47° Lo: 31°
Feels Like: 27°
Rensselaer
Clear
34° wxIcon
Hi: 47° Lo: 31°
Feels Like: 27°
Fowler
Clear
34° wxIcon
Hi: 46° Lo: 31°
Feels Like: 27°
Williamsport
Clear
34° wxIcon
Hi: 48° Lo: 30°
Feels Like: 34°
Crawfordsville
Clear
32° wxIcon
Hi: 48° Lo: 31°
Feels Like: 32°
Frankfort
Clear
36° wxIcon
Hi: 48° Lo: 31°
Feels Like: 32°
Delphi
Clear
34° wxIcon
Hi: 47° Lo: 30°
Feels Like: 28°
Monticello
Clear
34° wxIcon
Hi: 49° Lo: 30°
Feels Like: 28°
Logansport
Clear
34° wxIcon
Hi: 46° Lo: 29°
Feels Like: 27°
Clouds Build Sunday Ahead Of Snow
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 324537

Reported Deaths: 5594
CountyCasesDeaths
Marion44186858
Lake28094462
Allen18660301
Elkhart17663230
St. Joseph17256234
Hamilton13612170
Vanderburgh10028121
Tippecanoe896729
Porter855386
Johnson6718169
Hendricks6412158
Vigo625889
Monroe550450
Clark531078
Madison5239122
Delaware5075103
LaPorte481196
Kosciusko475941
Howard364177
Bartholomew335365
Warrick335372
Floyd329478
Wayne325678
Marshall311846
Cass303931
Grant287150
Hancock272957
Noble264946
Henry256437
Boone255054
Dubois245631
Dearborn228231
Jackson226334
Morgan221243
Gibson194926
Knox193021
Shelby192656
Clinton185421
DeKalb183932
Lawrence183849
Wabash172821
Adams172422
Miami170815
Daviess163145
Fayette153734
Steuben153414
Jasper151713
Montgomery149327
Harrison147624
LaGrange146131
Ripley145815
Whitley142314
Huntington133510
Decatur132543
Putnam131128
White131022
Wells130130
Clay130023
Randolph128121
Posey125816
Jefferson124116
Scott114520
Greene106053
Sullivan102716
Jay101913
Starke95022
Jennings90414
Spencer8908
Fulton87519
Perry85121
Fountain8228
Washington8127
Franklin73427
Carroll71913
Orange70028
Vermillion6607
Owen6468
Tipton60327
Parke6026
Newton57812
Rush5708
Blackford56612
Pike52719
Pulaski41815
Martin3705
Benton3643
Brown3574
Crawford3081
Union2782
Switzerland2655
Warren2562
Ohio2387
Unassigned0266

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events