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Huge loss of $58M to Cryptocurrency Mining Firm Riot Blockchain

Riot Blockchain Cryptocurrency Mining loss

According to financial reports, the cryptocurrency mining firm, listing under Nasdaq, suffered a massive loss of $58 million. The firm goes by the name Riot Blockchain, posted this huge loss. Comparatively, Bitcoin and other cryptocurrency firms are going through a good time, and the market is high for them. But, this time the gain is certainly not for Riot Blockchain.

As per the financial report, Riot Blockchain generated $7.7 million in mining revenue. It reportedly earned 1081 Bitcoin which also includes conversions from Bitcoin Cash. The firm earned over 3000 Litecoin too. The firm operates since last June in its facility of Oklahoma City having over 8000 miners.

Riot Blockchain managed to maintain a positive gross margin of 33 percent despite the massive loses. The company’s total liability amounts to a total of $45.2 million.

Carefully looking at the facts and figures, the firm made a profit in its daily operations. The daily operations included mining cryptocurrencies. But, as a whole, the company made a loss due to non-cash expenses. The non-cash expenses included a reduction in the value of its hardware and also its mined coins.

SEC serves a subpoena to Riot Blockchain

The US Securities and Exchange Commission or SEC served a subpoena to the cryptocurrency mining firm, Riot Blockchain in April last year. It is investigating the assets and possible investment assets of the firm. The investigation is still going on.

The spokesperson of Riot Blockchain says that it is collaborating with the US Securities and Exchange Commission or SEC. The company notes that it is working on a cryptocurrency exchange which will go by the name RiotX. It also has filed with SEC to launch the proposal towards the end of the second quarter of this year.

As per matter of fact, Riot Blockchain named it as Bioptix initially when it started in 2017. It then went into blockchain and cryptocurrency after acquiring a minority stake. The stake which went by the name Coinsquare was a Canadian digital currency exchange. The firm has a 12.1 percent stake in the business, as per reports.

Riot Blockchains’s shares reportedly jumped to 50 percent when it changed its name and its direction towards cryptocurrency and mining. It is similar to Long Blockchain Corp who went through the same phase.

Riot’s auditor Marcum says the firm has not maintained control on financial reporting

According to the company’s auditor, the firm has not maintained effective control over financial reporting. The weakness caused adverse impacts on the operation of the company and can also result in misstatements to the financial reports. However, it did not affect the financial statement, according to the auditor.

The mining firm, Riot Blockchains claims that it does not have any long term debt. It also claims that it perceived a positive gross margin of 33 percent before depreciation, impairment, and amortization.

Reportedly, the company secured $3 million in bridge financing with lenders. According to the annual report, the firm currently possesses just more than $225,000 in cash as compared to $41.6 million towards the end of 2017.

Now, investors are attracted less towards blockchain technology, unlike in previous years. It can be the reason for Riot Blockchain’s massive loss in recent months. Unlike Bitcoin, Riot’s Blockchain fails to make a profit this time.

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