Hut 8 Agrees to $2.35M Settlement Over U.S. Bitcoin Merger Suit

Hut 8 has agreed to pay $2.35 million to settle an investor lawsuit alleging the company misled shareholders around its 2023 merger with U.S. Bitcoin Corp. The settlement, which still needs court approval, would resolve a securities class action filed in the U.S. District Court for the Southern District of New York.

The case matters because it highlights how crypto mining mergers can carry operational and disclosure risks for public-market investors. The lawsuit centered on claims that Hut 8 overstated the benefits of the all-stock USBTC deal while failing to disclose issues tied to a key mining venture.

According to the allegations, investors were not properly informed about persistent energy curtailment and internet connectivity problems at King Mountain, a Texas bitcoin mining joint venture in which USBTC held a 50% interest. The merger between Hut 8 and USBTC closed in November 2023.

The litigation gained traction after short seller J Capital Research published a critical report in January 2024. CoinDesk reported that Hut 8’s share price fell more than 23% after that report.

A court filing said the $2.35 million recovery represents about 19.6% of the estimated maximum recoverable damages. Hut 8 denied any wrongdoing or liability as part of the agreement. The company, formerly focused on bitcoin mining, now emphasizes AI data centers and high-performance computing, and CoinDesk reported its shares have risen more than 640% over the past year.