Argo Blockchain accused of misleading investors in class action lawsuit


Investors in crypto mining firm Argo Blockchain have filed a class action lawsuit accusing the miner of making false statements and omitting key information during its 2021 initial public offering (IPO).

A lawsuit recently filed on January 26 is directed at Argo and several of its executives and board members. affirms signature it has failed to reveal how susceptible it was to capital constraints, electricity costs and grid difficulties.

“The offering documents were negligently prepared and, as a result, contained misrepresentations of material facts or omitted to state other facts necessary so that the statements made would not be misleading,” the lawsuit reads.

As a result, investors claim the business was “less sustainable” than they had been led to believe, leading to an exaggeration of the miner’s financial prospects. The complaint stated:

“Had [the investors] Knowing the truth, they would not have purchased or acquired such securities, or would not have purchased or acquired them at the inflated prices that were paid.”

Argo published the information in question on September 23, 2021, when the company filed documents with the United States Securities and Exchange Commission (SEC) in connection with its initial public offering.

7.5 million shares were issued to the public on the same date at an offer price of $15, resulting in earnings before expenses of $105 million.

Since then, the miner’s share price has taken a beating and is currently trading at $1.96 a share after dipping as low as $0.36.

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The Argo Blockchain stock price drop from September 2021 to the present. Font: yahoo! Finance

Cointelegraph requested comment from Argo but did not immediately receive a response.

Related: Bitcoin Hash Rate Hits New Milestone With Miner Holding 1-Year Low

The recent demand comes a few days after Argo regained compliance with the Nasdaq listing rule on January 23, which requires a company to maintain a minimum closing offer price of $1 for 10 consecutive business days.

Argo has had to make some tough decisions to weather the ongoing bear market and the harsh conditions facing crypto miners. He announced on December 28 that he would be Sell ​​Your Flagship Mining FacilityHelios, to the digital asset investment manager Galaxy Digital for $65 million.

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The Helios mining facility during its grand opening. Source: YouTube

Crypto miners in general had a torrid year in 2022, with high electricity prices, falling crypto prices and increased mining difficulty, all eat on your bottom line.