Riot Blockchain- a Nasdaq-listed company previously known as Bioptix, turned out to have major material weaknesses according to auditors reports that we are reading more about in the latest cryptocurrency news below.
In the financial reporting, according to the US SEC filing, a ‘’material weakness’’ was found. Since 2018, Riot Blockchain had about $225,000 compared to the previous $42 million when the bitcoin price reached its all-time high. In the meantime, the company’s mining operation was able to generate about $7.7 million in revenue. The revenue comes after the production of 1,081 bitcoins including Bitcoin Cash and 3,023 Litecoins for the same year.
The company’s auditor warned that Riot failed to maintain ‘’proper financial reporting protocols’’:
“[Riot] has not maintained effective internal control over financial reporting as of December 31, 2018.”
In 2017, the company changed its operations and focused on blockchain and bitcoin including crypto mining services. After this, the shares of the company increased dramatically. Riot has since been under investigation by regulators after the change in name. Over the past year, however, the stocks of the company dropped by one-third of the previous value.
The auditor noted that there is a deficiency in Riot Blockchain’s financial reporting which could make the problems worse. There is also a possible ‘’material misstatement of the company’s annual or interim financial statements’’ according to the auditor.
The financial reports were reportedly filed late but are however clear of any mistakes. Riot Blockchain expects that the ‘’remediation of this material weakness will be completed prior to the end of fiscal 2019.’’
If the financial statements of the company reflect the management history of Riot Blockchain, it’s no wonder why they are under constant investigation. After the company changed its name, Riot had three changes in the CEO positions. Most recently, the company chose Jeff McGonegal to be the new CEO.
In 2018, John O’Rourke, now ex-CEO of the company, resigned after he was charged with market manipulation by the SEC. The charges were, however, not related to Riot Blockchain. After John, Chirs Ensey was hired as an interim CEO during the restructuring of the company but has since left Riot.
Riot aims to launch a US-based crypto exchange RiotX by the end of the second quarter this year.
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