Colorado-based Riot Blockchain Inc. is buying futures brokerage firm Logical Brokerage Corp in Miami, to create a futures brokerage option and a digital currency exchange. But is the move really legit?
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In a recent phone interview, Riot CEO John O’Rourke explained, “From a business standpoint and a customer service standpoint and a regulatory and compliance standpoint, there was a need for additional competition.”
O’Rourke is referring to the two most popular digital currency exchanges in the U.S.: Coinbase and Gemini, which he says have dominated virtually every aspect of the trading arena over the last two years. The exchange he’s seeking to build is designed to compete specifically with both companies.
Riot Blockchain’s Interesting History
Riot Blockchain is a former biotech equipment maker that now invests in crypto and digital currency startups. While the purchase price of Logical Brokerage has not been revealed, Riot has seen massive jumps in its stock price — as high as 23 percent — following the announcement.
It all sounds promising, but it’s hard to determine how long, or even if, the newfound fortune will last. Riot has stood on relatively shaky ground in the past, perhaps the most noticeable being in October of last year when the company decided to rebrand itself and examine cryptocurrency following months of lackluster sales, low financial performance and limited monetary growth.
Back then, the company was known as Bioptix. Though stocks surged and quadrupled following the big change, Riot’s power quickly waned. Those same stocks plummeted to less than half their value following bitcoin’s rise to $19,000 USD last December.
At press time, stock in the company is trading for nearly $16 a share, though just last week, a major holder in the company announced he was on the verge of selling his shares in the company. Barry Honig of Florida, who at one point held approximately ten percent interest in the company, sold his shares and said, “When stock goes up, you take a profit. Every good investor does it.”
Honig had previously threatened Riot’s predecessor Venaxis, Inc. with legal action after citing “conflict of interest” among the company’s primary executives.
What to Expect
The new exchange is slated to offer customers the opportunity to trade with five separate virtual currencies, including bitcoin (BTC) and bitcoin cash (BCH). O’Rourke says the acquisition should close somewhere around the end of February, while the exchange will open its doors this coming summer.
In a concluding statement, he added, “We have identified a substantial market need for additional options to serve a growing customer desire to transact in digital currencies within the U.S. Logical Brokerage helps provide a platform from which to service this market.”
Can Riot Blockchain keep the momentum up and provide a stronger trading experience? Post your comments below.
Images via CNBC, Benzinga, Pixabay