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HUT.US
id: 1098

Hut 8 ($HUT) Investor Settlement

The parties have reached an agreement to settle the case, but the terms are still being finalized. You can submit your application now, and it will be processed once claims filing opens.
S.D. New York
Court
1:24-cv-00904
Case number
02/13/2023
Class period Start
01/18/2024
Class period End
Hut 8 has reached a tentative settlement to resolve investor claims that it misled investors about USBTC’s financial condition and the quality of key mining assets acquired in the merger.

Outline:

On February 7, 2023, Hut 8 announced its merger with USBTC and framed it as a major energy and infrastructure opportunity. On November 30, 2023, the deal closed, bringing in USBTC’s King Mountain joint venture and other mining assets. Investors later claimed Hut 8 failed to disclose that USBTC was nearing bankruptcy and that King Mountain had serious energy and internet problems. On January 18, 2024, a short-seller report exposed those issues; $HUT fell 23.3%, and the matter has now moved to a tentative settlement.

Timeline:
  • February 7, 2023: Legacy Hut and USBTC announced their proposed merger.
  • February 13, 2023: Hut 8 filed the initial Form S-4 registration statement for the merger.
  • November 9, 2023: The SEC declared the registration statement effective, and Hut 8 filed the final prospectus.
  • November 30, 2023: The merger between Legacy Hut and USBTC closed.
  • January 18, 2024: J Capital Research published a report alleging USBTC was headed for bankruptcy and that the King Mountain joint venture had major energy and internet issues.
  • January 18, 2024: $HUT fell $2.16, or 23.3%, to close at $7.12 per share.
Background:

Hut 8 was formed through the November 2023 merger of Legacy Hut and US Bitcoin Corp. The company presented the deal as a merger of equals that would create a stronger energy and infrastructure platform for bitcoin mining and other compute-intensive workloads.

A major part of that story was USBTC’s asset base, including its 50% interest in the King Mountain joint venture in Texas. Hut 8 told investors the merger would improve its energy strategy and expand its access to power across a broader mining footprint.

Investors say that picture was misleading. According to the case, USBTC’s financial condition was far weaker than disclosed, and without the merger it allegedly faced imminent bankruptcy rather than a stable runway for continued operations.

The case also centers on the King Mountain site. Investors claim Hut 8 failed to disclose that the facility had already experienced significant energy and internet issues, even as it presented the merger as a major operational and infrastructure benefit.

Those issues came into public view on January 18, 2024, when J Capital published a report challenging the merger disclosures and the value of Hut 8's acquisition. $HUT fell 23.3% that day. The matter has now moved to a tentative settlement, though the available source does not state the amount or the next key dates.

What Can Investors Expect Now?

Hut 8 has reached a tentative settlement to resolve investor claims that it misled investors about USBTC’s financial condition and the quality of key mining assets acquired in the merger.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.
Case Type
US Securities Class Action
Case Status
Tentative Settlement
Alleged Offence
Misleading Statements, 
Financial Misrepresentation, 
Failure to Disclose, 
Omissions
Suspected Party
Directors, 
Management, 
Influencer, 
Hedge Fund
Security Type
Stocks
Trade Direction
Long
Filing date
02/07/2024
Lead Plaintiff Deadline
04/08/2024
Plaintiffs
Ryan Mayiras
Attorneys
Glancy Prongay & Murray LLP (New York, NY), The Law Offices of Frank R. Cruz (Century City, CA)
Defendants
Jaime Leverton, Shenif Visram
Judge
Hon. Jennifer H. Rearden
Trades matching type
FIFO

Frequently Asked Questions

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