Hut 8 Corp. has agreed to pay $2.35 million to settle a securities class action lawsuit stemming from its 2023 merger with U.S. Bitcoin Corp. (USBTC). The agreement resolves claims that the bitcoin miner misled investors about operational issues at a Texas mining facility, though the company denied any wrongdoing.
The lawsuit, filed in the U.S. District Court for the Southern District of New York, alleged that Hut 8 failed to disclose energy curtailment and internet connectivity problems at the King Mountain joint venture prior to the all-stock merger’s close in November 2023. USBTC held a 50% interest in that site before the deal. Investors argued that these undisclosed vulnerabilities affected the transaction's value.
The case gained traction after a January 2024 report by short-seller J Capital Research, which criticized merger-related disclosures and led to a 23% one-day drop in Hut 8’s stock. Litigation narrowed significantly when Judge Victor Marrero dismissed Exchange Act claims entirely and limited Securities Act claims to omissions about King Mountain’s infrastructure risks. Facing a more challenging legal path, Hut 8 indicated it would challenge traceability, and plaintiff counsel cited that risk as a factor in accepting the settlement.
The $2.35 million figure represents about 19.6% of the estimated maximum recoverable damages of $12.08 million. It exceeds the 12.9% median and 14.6% average recovery rates for Securities Act-only settlements in 2025, according to Cornerstone Research data. The settlement still requires court approval and covers investors who purchased Hut 8 securities between February 13, 2023, and January 18, 2024.
Hut 8 shares (NASDAQ: HUT) slipped 2.73% to close at $121.04 after the announcement, though they remained above a support zone near $120. The stock has surged over 640% in the past year, fueled by the company’s expansion into AI data centers and high-performance computing.
