NEW YORK - A class action lawsuit has been initiated against Hut 8 Corp. (NASDAQ: NASDAQ:HUT), a cryptocurrency and data mining company, for purported violations of the Securities Exchange Act of 1934. The legal action, filed in the United States District Court for the Southern District of New York, represents investors who acquired Hut 8 securities between November 9, 2023, and January 18, 2024.
The complaint alleges that Hut 8, following its merger with U.S. Data Mining Group Inc., also known as US Bitcoin Corp. (USBTC), did not fully disclose to shareholders that one of USBTC's major shareholders was an undisclosed related party. It also claims that USBTC's key asset, a joint venture bitcoin mining facility in King Mountain, Texas, had historically failed to provide adequate energy and high-speed internet, and that the profitability of certain USBTC assets was overstated.
These allegations came to light following a report by J Capital Research on January 18, 2024, which suggested that Hut 8's merger with USBTC was based on several misstatements. The report also posited that without the merger, USBTC would have faced bankruptcy and estimated that USBTC's value was approximately 70% less than the $745 million Hut 8 paid to acquire it. Consequently, Hut 8's stock price dropped by 23.3%, closing at $7.12 per share on the day of the report's publication.
Investors who have suffered losses in their Hut 8 investments and wish to discuss their legal rights have been advised to contact Bernstein Liebhard LLP, the law firm representing the class action, by April 8, 2024, if they wish to act as lead plaintiff. The lead plaintiff will direct the litigation on behalf of the other class members. Those who do not move to be a lead plaintiff may still be part of the class action as an absent class member.
Bernstein Liebhard LLP, with a history of recovering over $3.5 billion for its clients since 1993, is handling the lawsuit. The firm has a track record of litigating numerous lawsuits and class actions, earning recognition in The National Law Journal's "Plaintiffs' Hot List" and The Legal 500.
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