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A joint class action lawsuit has been filed against embattled cryptocurrency mining platform Argo Blockchain by its investors who purchased the Company’s American Depository Shares (ADSs). Argo Block Blockchain is being accused of making false and misleading statements during its initial public offering (IPO) in September 2021.
As per the filed lawsuit;
“The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading.”
Instead of listing the risks involved in investing in its venture, the crypto miner avoided mentioning key concerns which could have helped investors make informed decisions. At that time, Argo Blockchain was at risk of spiking electricity bills, network difficulties, capital restrictions as well as other costs, and all this information was omitted during the IPO. Ultimately, Argo was not sustainable as it was portrayed during that time.
“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.”
Argo Blockchain Drowns in Debt
In the end, all of these constraints impeded the capacity of the company to mine Bitcoin (BTC), perform business strategy, meet obligations and run its flagship facility Helios. In December, the UK-based cryptocurrency miner inked an agreement with Galaxy Digital Holdings to sell its Dickens County-based Helios facility which was valued at $65 million.
As part of Galaxy Digital Holdings’ commitment, another $35 million asset-backed loan was included to be released to Argo Blockchain. Some Helios facility machines including 23,619 Bitmain S19J rigs and some others in Canada were used. This loan was requested to address Argo’s debt with NYDIG and North Mill Commercial Finance which was at $84 million and $1 million respectively at the time.
It is however noteworthy that Argo Blockchain has made several efforts to reduce its debt before it deteriorated to the present situation. Last year, the miner sold off a huge percentage of its Bitcoin holding to offset its crypto asset-based koan with Galaxy Digital. About 887 BTC were sold at an average rate of $22,670 amounting to $20.1 million.
The post Argo Blockchain Faced With Lawsuit For Misleading Investors appeared first on Blockchain, Crypto and Stock News.
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