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Bitcoin Miner Bit Digital suffers lawsuit for alleged fraud

Bitcoin Miner Bit Digital suffers lawsuit for alleged fraud

Bit Digital, a Nasdaq-listed Bitcoin miner, suffers a class-action lawsuit in the U.S. as investors are condemning the company for presenting false and misleading statements. The case was filed on Wednesday in the Southern District Court of New York. The filing involved investors who purchased a stake in the mining company from December 21, 2020, to January 8, 2021. 

Investors claimed that the mining company made inaccurate and misleading statements and declined to reveal its mining operations’ real extent. Moreover, the main charges in the lawsuit involve distorting the scale of the company’s Chinese Bitcoin mining business. The case charges various accusations against Bit Digital by J Capital Research. The research company declared that it enquired with the Chinese governments. It discovered that the mining company does not possess any Bitcoin mining infrastructure. 

J Capital Research claims Bit Digital lied about Bitcoin Mining Farms in China

According to J Capital Research, Bit Digital deceived about possessing Bitcoin mining farms in development across China. The firm’s website pretends to have above 40,000 mining rigs recently in operation. Thus, exercising a hash rate of 2,253 petahashes per second, producing mined over 1,500 BTC by the beginning of 2020. Nevertheless, researchers at J Capital announce that they contacted government officials in the Chinese provinces in which Bit Digital claims to work. They discovered that no one had ever learned about them. Moreover, the companies from which the mining company stated to have bought new miners have rejected any such contract.

Bit Digital issued a response to the allegations made by J Capital, aiming out that the company had recorded all of its documentation with the SEC and had always attempted to renew investors and regulators with specific data. If the mining company declines to do so, it will produce a default judgment for relief. Meantime, the allegations’ influence was exhibited in the company’s share price, as it went down by 45% from the peak reached earlier this month. Moreover, the J capital has directed a trial by jury. Bit Digital must reply within 60 days. If the mining company declines to do so, it will bring about a default judgment for relief. 

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