Hut 8 Fights Shareholder Lawsuit Over Stock Manipulation Claims

Hut 8 Moves to Dismiss Class-Action Lawsuit

Hut 8 Corp. has filed a motion in a New York federal court to dismiss a class-action lawsuit filed by its shareholders, stemming from allegations made by short-seller J Capital Research. The report accused Hut 8 of overpaying for US Bitcoin Corp. (USBTC), a company with operational issues. Hut 8 claims that the report was part of a strategy to devalue its stock for financial gain.

Company Denounces Short-Seller Tactics

In its motion, Hut 8 describes the lawsuit as an example of a “short-and-distort” tactic, where short-sellers manipulate market sentiment to profit at the expense of shareholders. The company argues that such lawsuits often lead to the amplification of short-seller claims and are typically dismissed by courts.

Allegations Surrounding USBTC Acquisition

The lawsuit follows allegations from J Capital Research that Hut 8 had misrepresented the profitability of its acquisition of USBTC, concealed operational problems at a Texas facility, and potentially withheld information about ownership stakes. These claims led to a 23% drop in Hut 8’s stock price, prompting several shareholder lawsuits.

Stock Rebound and Legal Defense

Despite the claims, Hut 8’s stock price has since recovered, rising by 300% since the report’s release. The company argues that its public statements were protected by “safe harbor provisions” and that USBTC’s operational risks had already been disclosed. Hut 8 denies any wrongdoing or harm to shareholders.

Hut 8 Seeks Dismissal of Lawsuit

Hut 8’s motion concludes with a request to dismiss the lawsuit “with prejudice,” asserting that the plaintiffs have failed to demonstrate any false statements or a causal link between the alleged misrepresentations and the stock price drop. The company urges the court to dismiss the case entirely.