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
77° wxIcon
Hi: 92° Lo: 71°
Feels Like: 79°
Kokomo
Clear
77° wxIcon
Hi: 92° Lo: 69°
Feels Like: 78°
Rensselaer
Clear
73° wxIcon
Hi: 88° Lo: 66°
Feels Like: 73°
Fowler
Clear
73° wxIcon
Hi: 89° Lo: 69°
Feels Like: 73°
Williamsport
Clear
76° wxIcon
Hi: 91° Lo: 70°
Feels Like: 76°
Crawfordsville
Clear
71° wxIcon
Hi: 90° Lo: 71°
Feels Like: 71°
Frankfort
Scattered Clouds
78° wxIcon
Hi: 90° Lo: 70°
Feels Like: 80°
Delphi
Clear
75° wxIcon
Hi: 91° Lo: 70°
Feels Like: 75°
Monticello
Clear
75° wxIcon
Hi: 95° Lo: 69°
Feels Like: 75°
Logansport
Clear
73° wxIcon
Hi: 90° Lo: 69°
Feels Like: 73°
WLFI Radar
WLFI Temps
WLFI Planner

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 47432

Reported Deaths: 2687
CountyConfirmedDeaths
Marion11546683
Lake5104242
Elkhart321144
Allen2737129
St. Joseph190866
Cass16389
Hamilton1538100
Hendricks1390100
Johnson1256118
Porter72037
Tippecanoe6948
Madison65564
Clark64044
Bartholomew58244
Howard56557
LaPorte56326
Kosciusko5354
Vanderburgh5026
Marshall4823
Jackson4693
Noble46928
LaGrange4677
Hancock44035
Boone43743
Delaware43150
Shelby42325
Floyd37144
Morgan32731
Montgomery29320
Grant29126
Clinton2882
Monroe27628
Dubois2666
White26010
Henry25815
Decatur24932
Lawrence24225
Vigo2318
Dearborn22823
Harrison21222
Warrick21229
Greene18532
Miami1822
Jennings17411
Putnam1688
DeKalb1604
Scott1607
Daviess14216
Orange13623
Wayne1366
Steuben1282
Perry1279
Franklin1248
Ripley1157
Jasper1142
Wabash1122
Carroll1102
Fayette987
Newton9810
Starke923
Whitley905
Randolph784
Huntington742
Jefferson722
Wells711
Fulton691
Jay680
Washington681
Gibson672
Knox640
Pulaski641
Clay604
Rush563
Adams501
Benton480
Owen471
Sullivan441
Brown381
Posey380
Blackford372
Spencer371
Crawford300
Fountain302
Tipton301
Switzerland260
Martin220
Parke220
Ohio140
Vermillion140
Warren141
Union130
Pike100
Unassigned0193

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