Hut 8 agrees $2.35 million settlement over 2023 merger lawsuit

Investor class action tied to the U.S. Bitcoin Corp. deal alleged misleading disclosures about recurring power and internet problems at the King Mountain Bitcoin mining project in Texas.

BTC

36d ago

Fact Check

Every element of the claim is corroborated. TheEnergyMag (originating Block report by Wolfie Zhao) gives a detailed account: $2.35M settlement, SDNY court, Judge Marrero, Nov 2023 USBTC merger, King Mountain Texas JV energy/connectivity disclosure allegations, and a Jan 2024 J Capital short-seller report. KuCoin and BlockBeats independently confirm the $2.35M amount, ~19.6% of ~$12.08M max damages, and King Mountain operational-risk allegations. The 2024 Berger Montague notice and the SDNY complaint confirm the underlying lawsuit existed with the King Mountain disclosure claims. Sources are consistent with no conflicting evidence.

Summary

Hut 8 agreed to pay about $2.35 million to settle an investor securities class action linked to its 2023 merger with U.S. Bitcoin Corp. The suit covered shareholders who bought Hut 8 securities between Feb. 13, 2023, and Jan. 18, 2024, and alleged the company failed to adequately disclose recurring power issues and unreliable internet connectivity at the King Mountain mining joint venture in West Texas, where USBTC held a 50% stake. The proposed settlement, filed in the U.S. District Court for the Southern District of New York and awaiting approval from Judge Victor Marrero, represents 19.6% of estimated recoverable losses of $12.08 million. The deal was reached after mediation in May and includes no admission of wrongdoing.

Terms & Concepts

securities class action: Investor lawsuit alleging violations of securities laws
Bitcoin mining: The use of computing infrastructure to validate transactions and earn bitcoin rewards
joint venture: A business arrangement in which two or more parties share ownership and operations of a project