Crypto mining firm Argo Blockchain is not having the best of times as it has been challenged by its investors to a class action lawsuit over claims of misleading them according to the latest filing.
According to the Jan. 26 filing, the investors alleged that Argo and several of its executives and board members concealed vital information, stressing that the firm did not inform them how susceptible it was to capital constraints, electricity cost and network challenges.
The petition partly reads:
“The Offering Documents were negligently prepared and, as a result, contained untrue statements of a material fact or omitted to state other facts necessary to make the statements made not misleading.”
It would be recalled that Argo blockchain was compelled to sell its flagship mining facility, Helios, on Dec. 28, 2022, due to the crypto winter and the need to raise funds for the smooth running of its operation.
In light of the development, the investors claim that the business was less viable and sustainable than the initial package proposed to them, which could be ascertained in the overstatement of the miner’s financial prospects.
Earlier, Argo released 7.5 million shares to the public with an offering price of $15 which led to the proceeds of $105 million before expenses were incurred.
Argo’s Moment of Joy Abnegated by Lawsuit
While Argo blockchain has been in a celebratory mood since Jan. 23 when it regained compliance with Nasdaq’s minimum price rule, it appears that the latest lawsuit will indiscriminately end the celebration.
— Argo (@ArgoBlockchain) January 23, 2023
Until now, Argo has had to make some difficult decisions to weather the ongoing bear market and tough times. facing crypto miners. The previous year 2022 was one of the toughest seasons for Crypto miners due to the indiscriminate rise in electricity bills.
As a result, the mining firm disclosed that it would sell some of its assets and engage in equipment financial transactions in order to avert filing for bankruptcy.
It is noteworthy that Argo Blockchain in a Dec. 12 blog post disclosed that it was battling financial challenges and might likely file for Chapter 11 bankruptcy if there were no buyers to fill the void.
It is heartwarming that the crypto mining firm has been able to weather the storm and should also handle the lawsuit effectively and professionally.