Nasdaq-listed cryptocurrency mining agency, Riot Blockchain, filed its Type 10-Okay annual report back to the US Securities and Trade Fee (SEC), M
Nasdaq-listed cryptocurrency mining agency, Riot Blockchain, filed its Type 10-Okay annual report back to the US Securities and Trade Fee (SEC), March 25.
Amongst an extended checklist of different potential threat components to the enterprise, the report assesses the potential disruptions as a result of COVID-19 pandemic.
COVID-19 will have an effect on cryptocurrency mining enterprise
As a part of the Type 10-Okay an organization should embody details about any vital dangers to its enterprise. Riot additional subdivides these dangers into a number of sections, though apparently lists the dangers from COVID-19 as a cryptocurrency-related threat, reasonably than a basic threat:
“Our enterprise shall be adversely impacted by the consequences of the novel Coronavirus (COVID-19). Along with international macroeconomic results, the novel Coronavirus (COVID-19) outbreak and every other associated opposed public well being developments will trigger disruption to the actions of our worldwide suppliers and, probably, our mining actions.”
The report goes on to state that the corporate already has and can expertise additional disruptions to operations, on account of quarantines, self isolation and different restrictions of motion, stopping workers from performing their jobs.
In response to the report, Riot has six full-time workers, with actions counting on three consultants to handle and keep mining rigs.
Greatest threat to third-party provide chain
Whereas the danger of the brand new coronavirus to 6 workers and a warehouse filled with Antminers could also be restricted, the impact on third-party workplaces and factories, border closures and provide chains may show extra drastic.
Riot cites the truth that replacements for out of date mining rigs or spare components to restore present machines could now not be accessible. Nonetheless, as Cointelegraph reported, the corporate just lately obtained 4,000 new S17 Antminer Professional machines, initially ordered on the finish of final yr.
Lastly, the report states {that a} wider lockdown, together with necessary enterprise closures, would adversely have an effect on operations. Regulators haven’t designated cryptocurrency an important trade.
Decreasing expectations upfront?
COVID-19 is by far not the one threat cited by Riot in its annual report. In actual fact a full 18 pages of the 48-page doc is dedicated to threat components.
The report additionally notes that the corporate shouldn’t be worthwhile and has incurred losses since inception. It expects to proceed incurring losses for the foreseeable future, which can enhance as the corporate develops its enterprise. Mining prices presently outpace mining revenues.
The report additionally cites earlier failures of the corporate within the animal well being and life-sciences industries, and means that there is no such thing as a assure that its pivot to a cryptocurrency mining technique shall be any extra profitable.
Riot was certainly one of quite a lot of firms who took benefit of the cryptocurrency growth in 2017, by altering its identify to incorporate the phrase ‘blockchain’ to see its share value rocket from $eight to over $40.
It has since made cryptocurrency mining its core enterprise, though it additionally launched a cryptocurrency change in 2019, which it has since given up on.