According to an official announcement on Feb. 20, Riot has “opted to sunset further development of Riot’s U.S.-based digital currency exchange” in order to focus on cryptocurrency mining as part of its updated strategic priorities for 2020.
Following the announcement to shift its focus on Bitcoin mining, the company’s shares dropped more than 5%, trading at $1.40 at press time, according to CNBC data.
Industry experts disagree on the potential price impact of May 2020 Bitcoin halving — an event which will decrease block rewards on the Bitcoin blockchain. Changpeng Zhao, the CEO of major crypto exchange Binance, recently predicted that, since miners will have to spend twice as much to mine a single coin, the price of Bitcoin could increase significantly.
Riot cites the U.S. regulatory landscape as a factor for closing
Known as RiotX exchange, Riot’s crypto exchange business was purportedly launched in the second quarter 2019, following the company’s filing with the United States Securities and Exchanges Commission (SEC).
Riot said that its decision to close the newly launched exchange was caused by a number of factors, including the “evolving regulatory environment.” Riot wrote:
“Riot considered a number of factors when evaluating the RiotX decision including, but not limited to, the evolving regulatory environment, cybersecurity risks, and the current competitive landscape facing U.S. based cryptocurrency exchanges. Riot is considering opportunities to divest the limited assets associated with the RiotX in the best interest of the Company and its stockholders.”
Riot Blockchain has been concentrated on crypto mining operations and investing in blockchain technologies since 2017. Providing mining facilities for major cryptos like Bitcoin, Bitcoin Cash (BCH) and Litecoin (LTC), Riot has now reinforced its confidence in Bitcoin by focusing on BTC mining and pursuing opportunities more directly related to BTC mining, the announcement states.
As reported by Cointelegraph, Riot Blockchain is a former biotech firm that opted to change its name to include the word “blockchain” in 2017, subsequently seeing its shares skyrocket from $8 to over $40. The spike in share price subsequently brought Riot under the SEC’s spotlight in 2018.