Riot Blockchain May Launch Crypto Exchange After Acquiring Logical Brokerage Corp

Announcements, Blockchain, News | April 2, 2018 By:

Riot Blockchain has acquired registered futures broker Logical Brokerage Corp. and is planning to launch a crypto exchange and futures brokerage platform.

Riot Blockchain, formerly known as Bioptix, was among the first of a litany of companies to gain widespread notoriety by making unexpected pivots into the cryptocurrency and blockchain space. It intends to gain exposure to the blockchain ecosystem through its cryptocurrency mining operations, internally developed businesses, joint ventures, and targeted investments in the sector. Its primary focus is on bitcoin and general blockchain technology.

Logical Brokerage Corp. provides cryptocurrency brokerage services. The company was incorporated in 2013 and is based in Miami Beach, Florida. It is registered with the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association (NFA), an industry trade group.

With its acquisition of Logical Brokerage Corp., Riot Blockchain said it intends to investigate launching a digital currency exchange and a futures brokerage operation within the US. According to the company, neither the CFTC nor the NFA regulate spot-market digital currency exchanges or activity, although the CFTC’s jurisdiction is implicated when there is fraud or manipulation involving a cryptocurrency traded in interstate commerce.

“We have identified a substantial market need for additional options to serve a growing customer desire to transact in digital currencies within the US,” said John O’Rourke, Chairman and CEO of Riot Blockchain. “Logical Brokerage helps provide a platform from which to service this market.”

Separately, the company said that it will begin announcing the results of its cryptocurrency mining operations with monthly reports.

“On or prior to April 17, 2018, and within 15 calendar days following the end of each calendar month thereafter for a six-month period, it will publicly announce its gross cryptocurrency production for the previous month,” the company said. “Initially the company will release information for a six-month period and may discontinue such information release at any time. Such information will be unaudited and will reflect the activities of the installed mining servers that are operational at any given time, which may vary.”

After changing its name in October 2017 to include the word “blockchain,” the company watched its stock skyrocket from $8 a share to more than $38 during a cryptocurrency rally at the beginning of the year. Some shareholders have since filed three class action complaints, accusing the firm of violating US securities law by issuing false and misleading statements.

Specifically, the investors claim that despite its lack of blockchain expertise, the company changed its name to generate investor enthusiasm to further an insider scheme that would allow Riot’s controlling shareholders to dump their stocks at grossly inflated prices.