Wednesday, June 16, 2021

Alleged ‘ghost’ Bitcoin mining firm traded on Nasdaq faces class-action lawsuit

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Bit Digital, a Bitcoin mining firm traded on the Nasdaq inventory change, is the topic of a class-action lawsuit that alleges the corporate fabricated the extent of its Bitcoin (BTC) mining operations.

In line with the lawsuit, which was filed within the Southern District of New York court docket on Wednesday by plaintiff Anthony Pauwels, Bit Digital misled traders and made materially false claims in regards to the extent of its Bitcoin mining enterprise, inflicting important monetary hurt for traders.

Particularly, the plaintiff references an investigative report by J Capital Analysis that claims Bit Digital merely lied about having Bitcoin mining farms in operation throughout China. The agency’s web site claims to have over 40,000 mining rigs at the moment in operation, exerting a hash charge of two,253 petahashes per second, having efficiently mined over 1,500 BTC for the reason that starting of 2020.

Nonetheless, researchers at J Capital say they contacted authorities officers within the Chinese language provinces by which Bit Digital declare to function, solely to search out that nobody had ever heard of them.

When J Capital’s analysis hit information headlines, Bit Digital’s inventory value plummeted 25%. From BTBT’s peak valuation of $29.27 in early January, the inventory value has since fallen 44% to the present valuation of round $16.

On Tuesday, Bit Digital issued a response to the claims made by J Capital, declaring that the corporate had filed all of its documentation with the Securities and Change Fee and had all the time sought to replace traders and regulators with correct information.

Nonetheless, the plaintiff within the lawsuit towards Bit Digital says the agency’s government management — CEO Min Hu and chief monetary officer Erke Huang — had been able to dictate the contents of any and all paperwork regarding the working of the enterprise:

“Due to their positions with the Firm, [Hu and Huang] possessed the facility and authority to regulate the contents of the Firm’s studies to the SEC, press releases and shows to securities analysts, cash and portfolio managers and institutional traders, i.e., the market.”

Pauwels seeks reparations for the 1,000 items of Bit Digital shares he bought at a value of $21.81 every on Dec. 12, 2020, in addition to different compensatory damages, court docket charges and bills.

The plaintiff has demanded a trial by jury. No authorized response has been made by Bit Digital presently, nor did the corporate reply to Cointelegraph’s request for remark.