Coinsquare said that the partnership agreement with RiotX has been canceled and that the Canada-based firm will not power Riot’s planned cryptocurrency exchange. A company representative declined to comment further. The original article is included below:
As cryptocurrency trading goes, U.S. residents have access to an enviable array of exchanges and investing platforms.
Though barred from some offshore giants like BitMEX and Huobi, it’s tough to complain when platforms such as Gemini, Coinbase, Binance, Bittrex, and Robinhood leave investors with options designed for customers of virtually every skill level and trading style. Soon, U.S. investors will have access to yet another cryptocurrency exchange — this one run by a poster child of the blockchain bubble.
Announced last week, biotech-turned-bitcoin company Riot Blockchain is launching a cryptocurrency exchange through a new subsidiary called RiotX.
The company isn’t planning to build the exchange from the ground up. Rather, it has signed software licensing and services agreement with Coinsquare, one of Canada’s most well-known cryptocurrency exchanges. Under the terms of the deal, Coinsquare will provide a RiotX-branded version of its trading platform and give RiotX the exclusive right to use its software in the U.S. market.
Riot Blockchain, incidentally, is a minority shareholder in Coinsquare, having invested CAD$13.9 million in the exchange during multiple funding rounds held over the past year. In a recent filing, the company said that it owned 12.9 percent of all Coinsquare shares.
Public filings show that, in addition to approximately $485,000 in cash for successful deployment of the platform, Riot Blockchain will pay Coinsquare 450,000 shares of Riot common stock, as well as a 9.9 percent ownership stake in RiotX Holdings.
According to a statement, RiotX has, either itself or through its subsidiaries, obtained licensure to operate as a CFTC-registered futures introducing broker and FinCEN-registered money service business (MSB). Additionally, the firm says it has a money transmitter license in Florida and is pursuing additional state-level licenses.
Earlier this week, CCN reported that former Riot Blockchain CEO John O’Rourke had resigned from the firm, days after being charged by the Securities and Exchange Commission (SEC) with helping run a $27 million penny stock scam. Riot Blockchain was not named as a defendant in the complaint.