The U.S. Securities and Exchange Commission has dropped an investigation into Riot Blockchain, a cryptocurrency investment company based in Castle Rock.
Riot said in a news release that it received written notification from the SEC’s Division of Enforcement on Jan. 29 that the nearly two-year-old investigation had concluded and that no further actions would be taken against the company.
“The board of directors and management of Riot are pleased the SEC has concluded its investigation without recommending any enforcement action. Riot remains focused on the cryptocurrency sector with the goal of creating added shareholder value,” the company said in a statement.
Riot formed in October 2017 after a Florida investment group gained control of a little known Colorado biotech company called Bioptix, which had previously gone by the name of Venaxis and before that Aspen Biopharma.
Then-new CEO John O’Rourke and his team rebranded the money-losing company as Riot and shifted its focus to investing in cryptocurrency mining, an area popular with investors after the rapid surge in Bitcoin’s value.
Bioptix shares, which had been treading water in the $3 to $4 range, shot to a high of $38.60 on Dec. 19, 2017, before collapsing again in the first quarter of 2018.
The decline tracked with a sharp drop in Bitcoin’s value in early 2018. But the collapse gained additional momentum in February 2018 when a CNBC investigation raised questions about the company and its new management team.
The SEC announced its investigation into Riot in April of that year, which media reports at the time suggested was part of a larger query into companies that had added blockchain to their names to pump up their market value.
Riot made several cryptocurrency-related purchases, including direct investments into Bitcoin, cryptocurrency mining equipment and blockchain technology companies.
Losses have continued to surpass revenues at Riot, although in the third quarter of last year that gap narrowed, with $1.7 million in revenues and a loss of $1.9 million.
Jeffrey McGonegal, who was the chief financial officer of the old Bioptix and Venaxis, has been the CEO of Riot Blockchain since February of 2019.
Shares of the company hit a low of $1.12 at the end of last year, but closed at $1.45 a share on Wednesday. Part of that jump came after investors learned that the SEC was ending its investigation.
