Argo Blockchain‘s woes are worsening after a recent class action suit, following a disastrous 2022 in which it sold off its flagship mining facility.
Argo Blockchain investors have filed a class action lawsuit accusing the miner of making false statements and omitting key information during its initial public offering (IPO) in 2021.
Argo and several of its executives and board members are the targets of a new lawsuit filed on January 26. It claims the company failed to disclose its vulnerability to capital constraints, electricity costs, and network issues.
“As a result, the Offering Documents contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading,” the lawsuit stated.
As a result, the investors claim the business was “less sustainable” than they were led to believe, resulting in an overestimation of the miner’s financial prospects. According to the complaint:
“Had [the investors] known the truth, they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid.”
Argo disclosed 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 (IPO).
On the same day, 7.5 million shares were issued to the public at a price of $15, generating $105 million in proceeds before expenses.
Since then, the miner’s share price has fallen and is now trading at $1.96 per share, after falling as low as $0.36.
Cointelegraph reached out to Argo for comment, but did not receive an immediate response.
Argo regained compliance with Nasdaq’s listing rule on Jan. 23, which requires a company to maintain a minimum closing bid price of $1 for 10 consecutive trading days.
Argo has had to make some difficult decisions in order to weather the current bear market and the difficult conditions that crypto miners face. On December 28, it announced the sale of Helios, its flagship mining facility, to digital asset investment manager Galaxy Digital for $65 million.
Crypto miners had a rough year in 2022, with high electricity prices, falling crypto prices, and increased mining difficulty all eroding their profits.
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