Bitcoin [BTC] miner to face class action lawsuit… Details inside
- Argo Blockchain is facing a class action lawsuit filed by its investors.
- The lawsuit accuses the firm of misleading investors and misrepresenting facts.
Bitcoin [BTC] miner Argo Blockchain will be the subject of a class action lawsuit filed by its investors. The London-based mining firm has been accused of misleading its investors during its initial public offering (IPO) in 2021.
Argo’s CEO, other executives named in the lawsuit
According to a recent filing in the United States District Court for the Eastern District of New York, Argo Blockchain’s CEO along with other executives and board members have been named in the lawsuit. The investors have accused the Bitcoin miner of making misleading statements.
Furthermore, the investors have claimed that Argo failed to disclose several important facts pertaining to its operations during the IPO. This includes capital constraints, electricity and other expenses, and network difficulties.
According to the filing, these factors hampered the company’s ability to carry out Bitcoin mining operations, meet its obligations, and execute its business strategy.
Bitcoin miners’ response
Argo Blockchain’s investors have argued that these issues made the company’s offering documents false and/or misleading. According to them, the company overstated its business and financial prospects and the business was less sustainable than they were led to believe.
The filing read:
“The Offering Documents represented that Argo’s mining strategy purportedly involves ‘cost-effectively acquir[ing] the latest generation mining machines and install[ing] them in North American facilities that utilize predominantly…inexpensive power.”
News of the lawsuit comes barely a month after Argo struck a deal with Mike Novogratz’s Galaxy Digital, which involved a $35 million loan and the acquisition of Helios for $65 million. This deal helped the company avoid bankruptcy.
The Bitcoin miner’s share price fell by 7% over the past 24 hours. Data from the London Stock Exchange’s website shows that the stock is currently trading at $15.25.