Chinese mining provider suspected of fraud
The company’s shares plummeted 25%
Lawyers Calculate Potential Losses for Bit Digital Investors
International consortium of news organizations developing transparency standards.
One of the largest suppliers of mining equipment was convicted of violating the securities law
According to Hagens Berman, the company could have misled investors about its cryptocurrency mining activities. In particular, on January 11, 2021, the analytical company J Capital Research published a report, which claims that Bit Digital is running a “fake” cryptocurrency business “designed to steal funds from investors.” Bit Digital did not comment on the accusations at the time of writing..
At the end of the third quarter of 2020, Bit Digital announced the use of 22,869 Bitcoin miners in China. However, according to J Capital Research, the manufacturer’s claims are not true. The company contacted local authorities and was unable to confirm the declared number of mining farms..
“We are calculating the losses of investors and finding out if Bit Digital could have faked their business,” said Reed Kathrein, partner of Hagens Berman leading the investigation..
The news of a potential securities law violation has already caused Bit Digital (BTBT) shares to plunge 25.05% to $ 18.76.
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Market capitalization of the company decreased to $ 901 million.
Last year, BeInCrypto reported that Bit Digital purchased over $ 13 million in bitcoin mining equipment in exchange for its own shares. A total of 17,996 miners were reported, including 7025 Antminer S17 +, 9110 Antminer T17, 195 Antminer S17E, 32 Antminer S17Pro, 105 Antminer S19Pro, 1429 Whatsminer M20S, 100 Whatsminer M31S.
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