Argo Blockchain Lawsuit Alleges Bitcoin Miner Misrepresented Finances Before IPO

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Investors in Bitcoin mining firm Argo Blockchain have slapped the company with a class action lawsuit, accusing it of making false claims ahead of the IPO.

The London-based company raised $112.5 million in a September 2021 offering, selling 7.5 million shares to the public at $15 each.

In a filing, the lawsuit alleged that documents submitted before the IPO contained false statements and were not prepared in accordance with rules and regulations.

The lawsuit also alleges that Argo downplayed risks related to its capital constraints, electricity and network difficulties, and misrepresented the truth about Argos’ finances and business prospects.

The filing went on to say that the company produced 25% less bitcoin in May 2022 compared to April 2022 due to the aforementioned increased network difficulty, higher electricity prices and disruption to operations. mining at its Texas Helios facility.

Argo did not immediately respond to Decrypts’ request for comment.

Turbulent times for Argo

Argo has recently taken significant steps to reduce expenses and consolidate its finances. It sold its Helios mining facility in Texas to Galaxy Digital for $65 million in late December 2022.

The deal also saw Argo receive a new $35 million loan from Galaxy to refinance its existing debts.

Argos shares are currently trading at around $1.96, down around 87% from the IPO date, although an increase from the $0.38 at which they traded. once traded on Dec. 16 as stocks recently bottomed.

While Argo’s IPO investors were undoubtedly left behind, investing in many other miners would have produced a similar outcome.

Core Scientific, one of the largest publicly traded Bitcoin miners in the industry, announced that it had filed for Chapter 11 bankruptcy in Texas in late December 2022, while many others, such as Greenidge Generation, entered into complex financial restructuring agreements.

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