Class Action Filed Against Listed Bitcoin Miner Bit Digital Over Fraud Allegations

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A class action lawsuit has been filed against Nasdaq-listed Bitcoin mining company Bit Digital following recent fraud allegations.

According to a court document filed Thursday with the Southern District Court in New York City, the class action lawsuit seeks to reclaim damages for Bit Digital investors who made stock purchases between December 21, 2020 and January 8, 2021.

The defendants allege that the mining company made false and / or misleading statements and failed to disclose the true size of its mining operations, which reportedly had 22,869 Bitcoin ATMs in China.

On Tuesday, Bit Digital denied the fraud allegations made against it by J Capital Research in a report alleging the company “attempted to downplay the criminality of its actions.”

J Capital also claimed that the large number of mining machines reported by the company “just isn’t possible” after it reportedly contacted its government contacts in China.

“Accused” [Bit Digital] Positive statements about the company’s business, operations and prospects were materially misleading and / or had no sound basis, ”the court record reads.

Bit Digital announced Tuesday that the mines in mainland China are managed by XMAX Hong Kong and that all “utility bills and other charges” are paid to suppliers in Hong Kong.

Bit Digital must respond within 60 days. Otherwise, a default judgment would arise for relief.

The company’s shares (BTBT) fell 2.15% on Friday and are currently down 45% since the start of the year.