- Investors recently filed a class-action lawsuit against Argo Blockchain.
- The lawsuit alleges that the Bitcoin miner misled investors during its IPO in 2021.
- The company’s share price fell more than 7% over the past 24 hours.
Investors of Argo Blockchain have brought a class-action lawsuit against the British Bitcoin mining firm. The lawsuit accused the Bitcoin miner of misleading investors and misrepresenting several key facts related to its business and financial health during its initial public offering (IPO) in 2021.
According to a filing made in the U.S District Court for the Eastern District of New York, Argo Blockchain made misleading statements and failed to disclose that it was suffering from significant capital constraints, network difficulties, and electricity and other costs. The lawsuit names several of the Bitcoin miner’s executives and board members, including CEO Peter Wall.
The lawsuit claims that these issues kept the firm from mining Bitcoins, executing its business strategy, and meeting its obligations, which made Argo’s business less sustainable than investors were led to believe. Furthermore, the Bitcoin miner was accused of overstating its financial prospects and furnishing misleading and/or false offering documents during the IPO.
The investors argued that had they known the truth, “they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid.” They believe that Argo Blockchain’s conduct breached multiple sections of the U.S. Securities Act and the Exchange Act.
The class-action lawsuit comes less than a month after Argo Blockchain negotiated a $100 million deal with Galaxy Digital that helped it avoid filing for bankruptcy. The bailout included a credit line and the sale of Helios, Argo’s flagship mining facility located in Texas.
Argo Blockchain’s share price took a significant hit following the lawsuit. The stock fell more than 7.5% over the past 24 hours. The stock had been performing considerably well since the beginning of the year, rising over 114% from $7 to $15.25 at the time of writing.