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

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

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

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 present in operation, exerting a hash price of two,253 petahashes per second, having efficiently mined over 1,500 BTC because the starting of 2020.

Nevertheless, researchers at J Capital say they contacted authorities officers within the Chinese language provinces during 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 worth plummeted 25%. From BTBT’s peak valuation of $29.27 in early January, the inventory worth 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, mentioning that the corporate had filed all of its documentation with the Securities and Trade Fee and had at all times sought to replace buyers and regulators with correct information.

Nevertheless, the plaintiff within the lawsuit in opposition to Bit Digital says the agency’s govt management — CEO Min Hu and chief monetary officer Erke Huang — had been able to dictate the contents of any and all paperwork referring to the working of the enterprise:

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

Pauwels seeks reparations for the 1,000 items of Bit Digital shares he bought at a worth 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 right now, nor did the corporate reply to Cointelegraph’s request for remark.