Bitcoin miner Hut 8’s proposed $2.35 million settlement would end a securities case narrowed to alleged energy disclosures tied to USBTC’s King Mountain site.
Hut 8, a public Bitcoin mining company, agreed to settle a securities class action tied to statements about U.S. Bitcoin Corp. before its merger with Hut 8 Mining.
Although the settlement agreement is subject to court approval, TheEnergyMag reports it will apply to all persons who purchased or otherwise acquired Hut 8 securities in the U.S. or any U.S. exchange between February 13, 2023, and January 18, 2024.
The case was broader at first, but the court dismissed most of the claims. The part that moved forward focused on what investors were allegedly told about energy and internet risks at USBTC’s King Mountain joint venture, a Bitcoin mining site in Texas.
The claims pointed to warnings about grid failures, equipment breakdowns and technology outages. They also cited the company’s statement that “USBTC may face risks of Internet disruptions, which could have an adverse effect on the price of Bitcoin.”
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Settlement Avoids Share-Tracing Fight
The proposed settlement also avoids another legal fight that could have made the case harder for investors.
According to the filing, Hut 8 and the other defendants were expected to argue that investors who bought shares after the merger couldn’t connect those shares to the merger registration documents.
The defendants planned to argue that registered and unregistered shares were mixed after the deal, making it “virtually impossible to trace shares purchased in the aftermarket back to the registration statement and prospectus for the Merger.”
The plaintiff said the $2.35 million settlement gives investors faster recovery instead of years of further litigation. The filing estimates maximum recoverable damages at about $12 million, meaning the settlement would recover about 20% of that amount. Hut 8 and the other defendants didn’t admit wrongdoing.
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