Hut 8 to pay $2.35 million to settle suit to consolidate USBTC investors
Hut 8 has agreed to pay $2.35 million to settle a securities class action tied to its 2023 all-stock merger with US Bitcoin Corp.
Summary
- Hut 8 agreed to pay 2.35 million rand while pleading not guilty in a case related to conspiring investors.
- Investors say USBTC’s King Mountain site had power and internet problems before the 2023 merger.
- crypto.news reports Bitcoin miners are moving towards AI and HPC as the mining edge tightens across the industry.
The proposed settlement has been filed in the US District Court for the Southern District of New York and still requires court approval.
The lawsuit involved investors who bought or acquired securities of Hut 8 during the class action connected to the merger. The plaintiffs allege that Hut 8 and related defendants misled investors about USBTC’s operations and the amount of assets brought into the combined company.
The suspicions of the King of the Mountain are still in the middle
The dispute centered on the King Mountain joint venture in Texas, in which USBTC held a 50% interest prior to the merger. Investors suspect that the disclosure does not fully explain the power cuts and internet connection problems at the site.
The court previously dismissed parts of the lawsuit, including Exchange Act claims and Securities Act claims related to USBTC’s alleged financial condition prior to the merger. However, the court allowed the Securities Act petitions related to the allegations disclosed in King Mountain to move forward.
J Capital Research’s January 2024 short seller report added pressure to the argument. The report questioned the value of the USBTC asset and said King Mountain lacked reliable power and high-speed Internet access in key areas prior to the merger.
Hut 8 denies the charge
“The defendants plead not guilty and continue to deny that they engaged in any misconduct or violation of the law,” the plea agreement said.
The line is the heart of the deal. Hut 8 pays to settle the case, but the settlement does not involve an admission of wrongdoing. The documents also say the parties reached a settlement after mediation and accepted the arbitrator’s proposal in May.
The proposed payment of $2.35 million represents approximately 19.6% of the maximum recoverable damages. The filing said that rate is higher than the 12.9% median and 14.6% for residential-only acquisitions of the Securities Act in 2025.
Filing also implies that litigation is risky. The defendants planned to challenge the traceability because registered and unregistered shares were issued together and later merged into the market.
The AI pivot changes the Hut 8 story
The adjustment is related to the previous period of Hut 8’s integration history. The company’s current market story has shifted to power, computing, AI data centers and high-performance computing, while Bitcoin mining plays a minor role.
crypto.news recently reported that Hut 8 has signed a 15-year, $9.8 billion lease for a 352-megawatt Texas site built next to NVIDIA’s reference. That report framed Hut 8 as part of a broader shift in which public Bitcoin miners are seeking to capitalize on AI and HPC.
Hut 8 shares were trading near $121 in a recent market check. The stock has risen sharply over the past year as investors value AI infrastructure contracts, power access and long-term data center revenue more than mining alone.
For investors, the settlement closes one legal issue connected to USBTC, subject to court approval. It doesn’t settle all the controversy surrounding Hut 8’s business model, but it does reduce one court battle as the company pursues a broader data center strategy. A final hearing will determine whether the settlement moves from proposed terms to authorized class relief.
