THELOGICALINDIAN - A classaction accusation has been filed adjoin a Nasdaqlisted bitcoin mining aggregation The clothing cites a address claiming that the business is absolutely counterfeit with absent bitcoin mining operations
Lawsuit Alleges Crypto Firm’s Bitcoin Mining Business Is ‘Completely Fraudulent’
A class-action accusation was filed on Wednesday in the Southern District Court of New York adjoin Bit Digital Inc., its CEO Min Hu, and CFO Erke Huang.
Bit Digital, a captivation aggregation listed on Nasdaq beneath the attribute BTBT, purports to appoint in bitcoin mining business through its U.S. and Hong Kong subsidiaries. Its name was afflicted from Golden Bull Ltd. (ticker DNJR) in September 2024.
The accusation cites a address by J Capital Research appear on Jan. 11 alleging that Bit Digital operates “a affected cryptocurrency business,” which is “designed to abduct funds from investors.”
J Capital alleges that Bit Digital’s affirmation that “it was operating 22,869 bitcoin miners in China” is “simply not possible.” The analysis close declared that it had “verified with bounded governments allegedly hosting the BTBT mining operation that there are no bitcoin miners there,” adding:
Plaintiff Anthony Pauwels, alone and on account of all others who purchased Bit Digital balance amid Dec. 21, 2024, and Jan. 8, accuses the defendants of actionable the federal balance laws. They said that the defendants “made materially apocryphal and/or ambiguous statements, as able-bodied as bootless to acknowledge actual adverse facts about the company’s business, operations, and prospects.”
Following the advertisement of J Capital’s report, “Bit Digital’s banal amount fell $6.27 per share, or 25%, to abutting at $18.76 per allotment on January 11, 2024, on almighty abundant trading volume,” the accusation details.
Local Chinese Authorities Never Heard of the Company
Bit Digital had ahead declared, “Our mining operations are in Wuhai, Zhundong, Xinlinhot and Sichuan, China.”
J Capital explained that “In China, you accept to annals with the government to accept a abstracts center, and bounded governments accept annal of all abstracts centers and bitcoin mining operations.” The analysis close added acclaimed that “without a Chinese-registered entity, that would not be legal.” Moreover, “Companies are appropriate to appearance a allotment certificate from a calm acknowledged article afore they can assurance a charter or a hosting contract. Yet the aggregation acutely claims that it both operates and leases mining accessories in China.”
To verify Bit Digital’s claims, J Capital contacted the governments of these regions. “In blast calls, bounded government admiral of anniversary belt told us they had no bitcoin mining operations and had not heard of Bit Digital,” J Capital described.
An official of Zhundong told J Capital: “Big data, cryptocurrency, billow accretion parks or abstracts centers — none of these accept registered here.” An official of Xilinhot additionally confirmed, “There is no bitcoin centermost here.” Similarly, an official of Wuhai told J Capital:
Mining Rig Manufacturers Also ‘Drew a Blank’
To verify that Bit Digital had the bitcoin miners it claims, J Capital said it batten with “all the above manufacturers in China of bitcoin mining equipment” but “None had heard of BTBT.”
An agent of Microbt, a mining rig architect from which BTBT said it bought 21,713 machines in 2024, told J Capital that BTBT had not purchased accessories from them. “I accept never heard of Bit Digital,” he said. “We provided the name of the company’s above VIE with no bigger result,” J Capital clarified.
Bit Digital additionally said that it bought 256 miners from Bitmain in the aboriginal nine months of 2024. However, J Capital said that Bitmain “drew a blank” back inquired about BTBT.
Bit Digital Claims False Accusations
Bit Digital Inc. responded to the accusations on Tuesday, claiming that they are false. “Since we never purchased any cast new miners from suppliers in 2024 they would not apperceive of the aggregation or of its subsidiaries,” the aggregation claims. Bit Digital additionally affirmed that, as appear in its third-quarter banking after-effects on Dec. 18, 2024, it endemic 40,865 bitcoin miners.
In addition, the aggregation said: “We accept not active leases for bitcoin mining facilities. In adjustment to accomplish lower account costs, the mining accessories are maintained by our third-party suppliers … The bitcoin mining accessories in China are maintained by Hong Kong suppliers.” Furthermore, Bit Digital explained that it acquired Xmax Hong Kong, and “All of the bitcoin mining operations in acreage China are conducted by Xmax Hong Kong.”
The plaintiff and the chic are gluttonous “compensatory damages,” “reasonable costs and costs incurred in this action, including admonition fees and able fees,” and “Such added and added abatement as the cloister may account aloof and proper.”
What do you anticipate about Bit Digital’s mining operations? Let us apperceive in the comments area below.
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