The upcoming regulated cryptocurrency exchange called RiotX will offer three primary services namely banking, a trading engine and a digital wallet. RiotX will initially be available within the United States territory. As per a March 14, 2019 filing with the Securities and Exchanges Commission (SEC).
API Will Help Prevent Fraud and Abuse
The publicly traded United States-based RiotX Holdings Inc. will operate the new cryptocurrency exchange, while an Application Programming Interface (API) created by SynapseFi will handle its banking services.
The API will help in tracking the location and identity of users as a way of preventing fraud and abuse of the RiotX exchange.
Riot Blockchain explained:
“SynapseFi’s API will enable to Company to know where the user is when accessing RiotX, thereby enabling the Company to prevent a user from Montana, a state where the exchange of digital currencies is permitted, from traveling to neighboring Wyoming, where the exchange of digital currencies is not permitted, and using RiotX in the prohibited jurisdiction.”
Crypto Selection Informed by Internal and External Reviews
The application represents a shift in the company’s business focus after spending at least two decades in Biotech. The company rebranded from Bioptix, a firm manufacturing diagnostic machinery for the biotech industry to Riot Blockchain amid the 2017 crypto bull run.
The company shifted its focus to cryptocurrency mining, later acquiring a crypto brokerage and announced it planned to build a crypto exchange in March 2018.
According to the filing, the RiotX exchange will deal in Bitcoin, Bitcoin cash, Litecoin, and Ethereum. The selection of the said cryptocurrencies is informed by internal and external reviews and will only go on to include the cryptos for which it receives full regulatory and legal authorization to do so.
RiotX will also work with exchange software provider, Shift Markets, after it terminated its contract with the Canadian-based Coinsquare exchange during the 2018 SEC investigation. The firm, which claims to already have approval in five states, hopes to ultimately operate in the entire United States apart from Hawaii and Wyoming by the end of 2019.
The company that was founded in Colorado as Bioptix Inc. became Riot Blockchain in September 2017 and relocated to Nevada and currently operates as a crypto mining facility in Oklahoma City. The company’s Q2 2018 revenues were twice that of the previous quarter, and its stock prices surged from $8 to $40 after the name change. This led to suspicions from the SEC, which as a result stated that companies changing their names to include blockchain would face enhanced scrutiny.