Hut 8 Requests Court to Dismiss Shareholder Lawsuit

Motion Filed to Dismiss Class-Action Lawsuit

Hut 8 Corp. has filed a motion to dismiss a class-action lawsuit in a New York federal court. The lawsuit, initiated by Hut 8’s shareholders, stems from a report by short-seller J Capital Research, which accused the company of overpaying for US Bitcoin Corp. (USBTC), a firm with operational problems. Hut 8 argues that the report was part of a larger effort to lower its stock value for personal gain.

Short-Seller Strategy at the Heart of the Lawsuit

In its submission on December 2, Hut 8 described the lawsuit as a “short-and-distort” strategy, where short-sellers aim to profit from devaluing a company’s stock and then use legal action to reinforce their claims. The company argued that such tactics are often used to manipulate market perception and urged the court to dismiss the case, citing that similar lawsuits are frequently thrown out.

Allegations of Misrepresentation and Operational Issues

J Capital Research’s report, published in January, alleged that Hut 8 misrepresented the profitability of its acquisition of USBTC, hid operational flaws at a Texas facility, and possibly withheld information about ownership stakes. Following the release of this report, Hut 8’s stock price dropped by 23%, prompting shareholder lawsuits.

Hut 8 Defends Its Statements and Stock Recovery

Hut 8 contends that its stock has since recovered, increasing by 300% since the report was published. The company also argues that many of its public statements are protected by safe harbor provisions and that the operational risks of USBTC were disclosed. Hut 8 denies any harm to shareholders and asserts that the plaintiffs have not shown that the claims caused the stock drop.

Court Urged to Dismiss Lawsuit with Prejudice

Hut 8’s motion concludes with a request for the court to dismiss the case “with prejudice,” emphasizing that the plaintiffs have not proven that the company’s statements were false or that shareholders suffered any actual harm. The company urges the court to dismiss the lawsuit in its entirety.