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CLSK.US
id: 1533
CleanSpark ($CLSK) Misleading Acquisition and Hidden Partner Risks Case
A request is made for the court to officially recognize the group of plaintiffs as a class.
S.D. New York
Court1:21-cv-00511
Case number12/10/2020
Class period Start08/16/2021
Class period End- $CLSK investors filed a lawsuit against CleanSpark for hiding key risks related to its acquisition of ATL Data Centers and misrepresenting its expansion timeline.
- After disclosures about failed assets, related-party ties, and unrealistic growth claims, $CLSK dropped 9.16%.
Case Details:
In December 2020, CleanSpark ($CLSK) acquired ATL Data Centers, claiming the deal would allow it to rapidly scale its Bitcoin mining operations. The company told investors ATL had a 20MW facility ready for immediate expansion and framed the acquisition as a growth catalyst.
What CleanSpark didn’t disclose was that ATL had been hastily formed just weeks earlier and was directly tied to entities with troubled histories — including Fastblock and Virtual Citadel, both of which had ties to prior bankruptcies and failed operations. The assets CleanSpark acquired had previously been rejected by Marathon, another crypto mining company, following due diligence concerns.
CleanSpark also claimed the ATL site would expand to 50MW within 12 months, but internal reports showed that was never realistic. The facility required major infrastructure upgrades, and management knew power delivery was delayed by months. Meanwhile, the company continued to promote aggressive expansion timelines in investor presentations.
Eventually, analysts and investors began questioning the timeline and undisclosed risks around ATL’s background. As scrutiny increased, $CLSK dropped 9.16% on January 14, 2021.
Based on these events, $CLSK investors filed a lawsuit against CleanSpark, claiming the company:
- It failed to disclose that ATL Data Centers was tied to failed entities with a history of bankruptcy.
- It misled investors about the condition and scalability of ATL’s mining facility.
- It promoted unrealistic expansion timelines while withholding critical operational and acquisition risks.
Investors believe CleanSpark misrepresented the nature of the ATL acquisition.
Case Status
Motion to certify class
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
08/17/2021
Filing date
01/20/2021