Judge Dismisses Class-Action Lawsuit Against Iris Energy

According to Cointelegraph, a United States District Court judge has dismissed a class-action lawsuit brought by investors in Bitcoin miner Iris Energy. The investors alleged that the mining firm concealed key risks and misled them during its initial public offering (IPO) in 2021. In a Sept. 27 opinion order, US District Court Judge Jamel Semper dismissed the lawsuit without prejudice. The judge ruled that the investors could not prove that Iris Energy (IREN) had falsified statements or intentionally misled them. The lawsuit claimed that Iris Energy, its executives, and its underwriters, including J.P. Morgan and Citigroup Global Markets, violated both the Securities Act and the Securities Exchange Act during the 2021 IPO. The plaintiffs argued that there were several inaccuracies in documents related to the Australia-based crypto miner’s November 2021 IPO and other statements made in the following months. They also alleged that Iris Energy had concealed risks and failed to disclose information about loans taken to finance mining equipment. Additionally, they claimed the firm made false and misleading statements about its financial condition, including profits, losses, and assets. However, Judge Semper found that Iris Energy had no obligation to disclose all details about its loan financing. The plaintiffs failed to prove that there was anything materially misleading about Iris Energy’s disclosures. Iris Energy went public on Nov. 17, 2021, raising $232 million through its IPO. The firm’s share price debuted at $28 but quickly tumbled amid a broader sell-off in the crypto market. By Jan. 24, 2022, IREN’s share price had plummeted 69%, alongside a similar decline in the price of Bitcoin, which fell more than 36% during the same period. In a Sept. 30 statement regarding the dismissal, Davis Polks, the firm representing Iris Energy and its executives, said the plaintiffs sought to recover their losses during the broad, marketwide decline in Bitcoin’s value in 2022. Separately, Iris Energy has been targeted by short-selling firm Culper Research, which accused the Bitcoin miner of being “wildly overvalued” and not investing enough to remain competitive in the high-performance computing (HPC) industry. Culper, which disclosed its short-selling position on IREN, accused the company of making grand claims about its HPC plans while investing far less than required.