Class action lawsuit alleges Argo Blockchain misled investors
Investors of crypto mining firm Argo Blockchain have filed a class action lawsuit alleging that the miner misled them during its initial public offering (IPO) in 2021.
The lawsuit, filed on Jan. 26, claims Argo’s offering documents were “negligently prepared,” containing false statements or omitting key facts that would have made the statements misleading.
Allegedly, Argo experienced serious capital and electricity constraints and network difficulties that limited its resources and ability to mine bitcoin (BTC) and maintain its Helios facility.
These issues made it increasingly difficult for Argo to meet its business obligations, disproving their prior claims of sustainability. Hence, this lack of candor has landed Argo and its representatives in a legal battle, with investors holding them accountable for their false and misleading statements.
The lawsuit highlighted the following:
“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.”
A new press release has revealed a lead plaintiff will be chosen to front the Argo class-action lawsuit. The appointed plaintiff will have authority over all other class members concerning the ongoing lawsuit and can select a law firm to represent its legal interests.
Investors have until Mar. 27 to take action and become the lead plaintiff in this legal case.
Continued setbacks for Argo
On Dec. 16, 2022, Argo was informed by the Nasdaq Stock Market that their stock had not maintained the minimum bidding price of $1.00 in the previous thirty consecutive business days, breaking the Market’s Listing Rule 5450(a)(1).
To regain compliance, the company needed to keep the closing bid price at a minimum of $1.00 for ten consecutive trading days. Argo fulfilled this requirement on Jan. 13, and Nasdaq confirmed the same through an official announcement on Jan. 23.
Moreover, facing potential bankruptcy, Argo recently averted the crisis by selling their Dickens County, Texas, mining plant, Helios, to Galaxy Digital for $65 million. Galaxy Digital also provided a loan of $35 million to Argo to help with their restructuring.
Meanwhile, Argo may have to contend with more trouble ahead after the recent lawsuit that could disrupt its market standing and lead to price fluctuations in its stock price in the coming days.
Mining perspectives for 2023
The future of cryptocurrency mining is uncertain, but one thing is for sure: crypto miners will have to keep up with the ever-increasing complexity and power requirements of mining operations.
As mining becomes more advanced, turning a profit will become even more challenging, making it a high-risk endeavor. On the bright side, as machines become more sophisticated, so will the security protocols to protect cryptocurrency wallets from malicious attacks.