Tanju Akbıyık 
Hut 8 Mining has applied to a New York federal court to dismiss a class action lawsuit brought by its shareholders. The company claimed that this lawsuit was based on a short-selling report and that the purpose of the report was to make speculative gains by lowering the company’s share price.
Allegations and Consequences of the Short-Seller Report
A January report by J Capital Research alleged that Hut 8 made misrepresentations to make its acquisition of US Bitcoin Corp. (USBTC) look profitable, concealed operational issues in Texas, and failed to transparently disclose ownership stakes. After the report, Hut 8 shares fell 23% and multiple class action lawsuits were filed by investors in March. These lawsuits argued that the allegations raised by the report caused harm to investors.
Counter Arguments from Hut 8
Hut 8 noted that its share price has now fully recovered and has increased by more than 300% since the J Capital Research report. The company also argued that its forward-looking statements were protected by safe harbor arrangements and that potential risks associated with USBTC were publicly disclosed.
Other points they raised in the case were:
- The plaintiffs failed to provide sufficient evidence that misrepresentations were made.
- That there was no direct link between the share price decline and the allegations made.
Hut 8 argues that shareholder litigation is an attempt derived from short-seller reports that usually ends in failure. Noting that such lawsuits are often dismissed, the company said that its own lawsuit should be similarly dismissed.
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.