The legal woes of biotech company-turned-crypto miner Riot Blockchain don't appear to be slowing down.

In the firm's latest 10-Q quarterly report, filed to the U.S. Securities and Exchange Commission (SEC) on Tuesday, Riot Blockchain provided more details about the SEC's investigation into the firm's blockchain pivot, noting that the regulator is now looking into a number of the firm's registration statements, as well as its acquisition of a minority stake in Canadian crypto exchange Coinsquare.

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Riot first disclosed that it had received document requests from the SEC earlier this year, noting that the regulator was looking into specific statements about its financial health from the past 10 months.

Perhaps more notably, Riot Blockchain stated that the SEC's Division of Corporation Finance and Division of Investment Management had sent several comment letters related to the company's cryptocurrency mining efforts.

The filing stated:

"The comments raise matters related to, among other things, the unsettled nature of accounting treatment for the Company's cryptocurrency mining and the fair value method selected by the Company (as opposed to intangible accounting methods proposed by some experts) and applicability to the Company of the Investment Company Act of 1940, particularly as relates to the Company's minority interest in goNumerical, Inc. a/k/a Coinsquare."

When the subpoena was first issued in April, Riot said the SEC was investigating its assets and assets' classification, CoinDesk reported at the time. The SEC does not intend to act on Riot's registration statements while the investigation is ongoing, this week's filing said.

Ongoing effort

The filing noted that Riot Blockchain is communicating with the SEC's Division of Enforcement, Division of Investment Management and Division of Corporation Finance, and "intends to cooperate fully with the examination."

However, the report cautioned that "management is unable to make a meaningful estimate of the overall impact on the company's operations, if any, that would result from an unfavorable final determination of these matters or the investigation of the company."

Riot also admitted that the SEC was looking into the stocks that the company issued its employees over the last year, though some of these preceded its blockchain pivot. This latest letter was sent to the SEC at the end of July.

SEC investigations aside, Riot reported that it holds nearly $5 million in digital currencies, after seeing a nearly $3 million dollar loss from the ongoing bear market over the last eight months.

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Overall it claims to have about $28 million in total assets (and an equivalent amount in liabilities and stockholders' equity) as of June 2018, down from more than $52 million at the end of 2017.

SEC image via dennizn / Shutterstock

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