When it comes to analyze either capital market or crypto market, the Securities Exchange Commission keeps its closed eye on what is happening inside the dope of the markets. As per the valid source of CNN Money, more and more companies trying to ride their growth story on crypto currency are inflicted due to the SEC’s probe executed in Riot Block chain – the company is focused on building, supporting, and operating Blockchain technologies by working on healthcare domain like it makes fertility hormones for cows, pigs and horses under the name of Bioptix. The recent order issued under the authority of SEC, the stocks of Riot Blockchain dipped by 77% in 2018. With this the sudden burst of the Bitcoin bubble hurting Riot Blockchain (RIOT). However, the more disruptive is especially when the company disclosed the internal matter with investors that it had received a summon from SEC. The news endangered Riot Blockchain by causing its prices more than 10% in last two days. Still the company is facing the issues. At a time of SEC filing, Riod Blockchain mentioned that many companies that fall in to the category of block chain and crypto currency businesses have faced the same situation from the SEC. Which is an additional industry risk that the company face, because this type of investigation executed by SEC could not only material harm the company, but its operations and entire industry altogether. Accordingly CNN Money, the Nasdaq has already warned the company to delist if it fails to organize an annual shareholder meeting to be scheduled soon. By replying to Nasdaq stock exchange, the company said that it did not have even a minimal number of officers and members of a committee, however it hoped to be able to reconvened all of them and it plans to schedule the meeting not later than middle of next month. The company has specified that it would not expect to get assurances from quorum this time. Let me tell you that Riot Blockchain is said to be the only company which is guilty of trying to cash in on the cryto crazing world. The stocks of one more company called ‘Long Blockchain’ which is well known as Long Island Iced Tea have plummeted by 90% approx. Besides this the stock prices of a small company – Nodechain have dipped by 90% and above in 2018. The company initiated its crypto currency mining business since last December.
Let me tell you that not only SEC, but all over the world the regulators keep an eye on companies seeking ways to leverage block chain technology in order raise capital especially through initial coin offerings (ICOs). It’s very obvious that the capital raised through ICO are digital currencies in nature (compared to shares/stocks through which the capital raised in initial public offerings) that are not regulated by the SEC. Not only regulators, but also social sites banned and restricted taking ads of ICO/Token sale, for example, Twitter banned ICO ads just last month whereas Google restricted crypto ads in June last year. The largest social site Facebook announced in January this year that it prohibited the promo ads when it comes to raise funds through ICOs.
Thanks to the watchdogs like SEC and other regulator that save investors’ money from plunging in unethical activities organized by the new buzz word – block chain technology.