Riot, while a filing with the U.S. Securities and Exchange Commission (SEC), has recently disclosed that the new entity will be called RiotX and include three key services: banking, trading and a digital wallet. This change comes after serving two decades in biotech, when it rebranded from Bioptixto Riot Blockchain and shifted business focus from biotech to crypto mining in October 2017. Following this milestone event, the publicly traded US Company acquired a crypto brokerage and made an announcement of building an exchange in March 2018.
In August 2018, the SEC had deepened its investigation into crypto mining firm Blockchain Riot, as firms that changed their name to include blockchain face higher scrutiny. It was summoned and faced regulatory issues by the SEC over its sudden pivot to a blockchain business model and a resultant stock price hike. Since then, the publicly traded US company saw many post variations like a change of its board of directors and resignation of its CEO. However, in a recent SEC filing done on March 14, the new exchange is expected to be managed by its subsidiary RiotX Holdings Inc with a key focus on bitcoin mining.
It has plans to set up an API created by software provider SynapseFi for RiotX’s banking services. This will give users the freedom to create accounts connected to accredit banking institutions in the U.S., letting them to hold and transfer fiat and crypto assets. They will also be able to use the service in U.S. states where crypto exchanges are not legalized but will be restricted to a range of customers, to begin with. The API will also track the location and identity of users to prevent fraud and improper use of its RiotX exchange
While filing the registration, Riot Blockchain quoted: “SynapseFi’s API will enable the Company to know where the user is when accessing RiotX, thereby ensuring the Company to prevent a user from Montana, a state where the exchange of digital currencies is permitted, from traveling to neighboring Wyoming, where the exchange of digital currencies is not permitted, and using RiotX in the prohibited jurisdiction.”
RiotX is collaborating with exchange software provider Shift Markets for the upcoming trading services and has terminated its contract with Canadian exchange Coinsquare during the SEC investigation in 2018. As per the filed registration, RiotX will finally operate in all U.S. states bar Hawaii and Wyoming by the end of 2019, and the firm claims to have prior approval in five states. Its subsidiary, RiotX Holdings Inc, would operate the new exchange, and related banking services would be handled by an Application Programming Interface (API) created by software company SynapseFi. The API will serve as a security enhancement as it features to track user location and prevent fraudulent activities.
Riot Blockchain Inc. is focused on creating, supporting and managing Blockchain technologies. It intends to be a part of the disruptive blockchain technology ecosystem through its cryptocurrency mining operations, internally developed businesses, and joint ventures.
Riot is not the only company to transition its business to the blockchain. Many other companies have shifted their focus to the blockchain, for instance, Long Blockchain Corp., originally known as Long Island Iced Tea, made a transition from its beverage manufacturing business to crypto mining.