Odaily Planet Daily News A New York federal court has allowed a class action lawsuit against cryptocurrency mining company Stronghold Digital. Stronghold has been accused of misleading investors in the IPO.
Lead plaintiff Mark Winter alleges that Stronghold’s registration statement and prospectus contained materially false and misleading information about the company’s mining operations. It included false and misleading information about, among other things, the company's ability to generate revenue, according to a court order filed Thursday.
The suit alleges that Stronghold violated parts of U.S. securities laws by misleading investors about a supplier’s breach of contract and the performance of bitcoin mining machines.
Winter accused Stronghold of overstating its computing power while underestimating its production costs. Because of the alleged misrepresentation, the plaintiffs argued that they had suffered losses at an artificially inflated price when they purchased Stronghold stock. (Blockworks)