Argo Blockchain has been sued by investors
A BTC mining company has been accused of making misleading statements.
Argo Blockchain is one of the big Bitcoin miners who felt the effects of the cryptocurrency winter and unfavorable macroeconomic conditions. Those who invested in the entity accused it of making "untrue" and "misleading" statements and omitting "key information".
Argo Blockchain sued by investors
The cryptocurrency winter has hit Bitcoin miners hard as they have suffered from the decline in the profitability of its mining. Recently, a well-known company in the sector was accused by its investors of making false statements, as well as omitting "key information" during its initial public offering (IPO) in 2021.
According to a lawsuit filed on January 26 this year against Argo Blockchain and several of its directors and board members, the entity did not disclose how vulnerable it was to capital constraints, an increase in the cost of electricity necessary to power excavators, and network difficulties - including increase in competitiveness with the decreasing price of BTC.
The complaint stated that the documents presented to the investors had been prepared carelessly. This, in turn, led to the documents omitting "essential facts" or making incorrect statements about them. According to investors, such assurances have misjudged the company's capabilities. They now claim the business was "less sustainable" than they thought.
The plaintiffs assume that if they had known the reality, they would not have bought Argo Blockchain securities at inflated prices.
Strong fall in the value of ARBK shares
On September 23, 2021, the aforementioned company issued 7.5 million shares to the public at a price of $ 15 per share. Since then, with the deteriorating situation in the markets, the value of shares has dropped significantly. ARBK costs only $1.96 today. At a critical moment, the price dropped to $0.36, but Argo Blockchain managed to regain compliance with Nasdaq requirements.
In order to survive on the market, the company had to make some tough decisions. In late December 2022, Argo Blockchain sold its main Helios mining facility to Galaxy Digital for $65 million.
Despite unfavorable conditions, Bitcoin miners fiercely compete with each other. This is evidenced by the increase in the difficulty of mining BTC to record levels.