Argo Blockchain has been accused of violating federal securities laws during its 2021 American Depositary Shares (ADS) initial public offering (IPO), according to documents filed in the U.S. District Court for the Eastern District of New York.
The latest development is yet another blow for Argo, which has struggled to survive in a brutal crypto winter. He claimed that the document was prepared carelessly.
Lawsuit Against Argo
in class action lawsuitArgo Blockchain investors accuse the company of making false statements and omitting key information, not disclosing capital constraints, electricity, and other costs, in addition to network issues. The filing said the restrictions are hampering its ability to mine bitcoin and operate the Helios facility in Texas.
The discussion centered on Argo’s business being less sustainable than investors were led to believe. They also claimed that the company’s business and financial prospects were exaggerated.As a result of “fraud and omission” by Argo, investors suffered heavy losses.
“The Offering Document was negligently prepared and as a result contains false statements of material fact or contains other statements of fact necessary to avoid making misleading statements. was omitted and was not prepared in accordance with the rules and regulations governing its preparation.”
At its IPO, the London-based miner sold approximately 7.5 million ADS shares at an offering price of $15, generating approximately $105 million in revenue for the mining company. However, the stock has since fallen significantly.
Crypto Winter proved difficult for Argo
Alongside a handful of miners, Argo Blockchain has been forced to sell more than it mined in a month last summer as prices fell. His previously announced plans to raise $27 million were scrapped as the stock crashed. By the end of 2022, the stock will cease trading on the Nasdaq.
Argo has sold its Helios mining facility in Texas to Galaxy Digital for $65 million. The deal also required him to provide a $35 million loan for Galaxy to keep the mining company out of bankruptcy.
Binance Free $100 (Exclusive): Get $100 free and 10% off fees in your first month of Binance Futures when you register using this link (Clause).
PrimeXBT Special Offer: Register using this link and enter the POTATO50 code to receive up to $7,000 on your deposit.