Hut 8 settles $2.35M lawsuit over merger disclosure

Hut 8 will pay $2.35M to settle a lawsuit over its 2023 merger with U.S. Bitcoin Corp, resolving claims it failed to disclose operational issues at King Mountain. Hut 8 denies any wrongdoing.

Hut 8 has agreed to pay $2.35 million to settle a securities class action lawsuit stemming from its 2023 all-stock merger with U.S. Bitcoin Corp (USBTC). Investors alleged that Hut 8 overstated the merger's benefits and failed to fully disclose energy curtailment and internet connectivity issues at the King Mountain mining site in Texas, where USBTC previously held a 50% stake. The lawsuit, filed in the U.S. District Court for the Southern District of New York, covered investors who acquired Hut 8 securities during the merger period. While most claims about USBTC's financial condition were dismissed, the court allowed claims regarding insufficient disclosure of infrastructure risks at King Mountain to proceed. The settlement, which still requires court approval, resolves these remaining claims. Hut 8 denied all allegations and admitted no wrongdoing or liability under the settlement terms. The litigation gained momentum after a short-seller report in January 2024 led to a significant drop in Hut 8's share price.