TL;DR Breakdown
- Bit Digital is set to face a lawsuit in New York.
- J Capital Research published a report that was highly critical of the crypto mining firm.
- The company says “false accusations” are being spread.
A Nasdaq listed crypto firm, Bit Digital, is preparing to face a lawsuit filed against it by its investors. According to these aggrieved investors, the firm made false and misleading statements on its Chinese BTC blockchain mining operations.
J Capital Research report dents Bit Digital
A report published by J Capital Research was highly critical of Bit Digital and suggested that the firm was fraudulent and it was looking to siphon funds off unsuspecting investors. The report also made it known that key executives of the firm were either in jail or on the run as the authorities are seeking them for carrying out a fraudulent P2P business.
J Capital Research also reported that Bit Digital claims that having over 22,000 bitcoin miners in China was a ruse. According to the report, the crypto mining firm has no subsidiary in the Asian country, so any claim of an operation in the country would be illegal. The rigs could be subject to confiscation.
The report also highlighted that the firm had chosen to replace one of its top executives in September 2020 because he was in jail, but the company chose to say that they were “unable to reach him.” The report also stated that a Shanghai court had frozen a VIE bank account, and it has remained so for a while.
Bit Digital makes a case for its defense
Bit Digital issued a press release to refute the earlier report made by J Capital Research. According to the press statement, the firm’s management has been compelled to deny “certain false accusations about the company.”
The firm also mentioned that the public could view details of its mining operation on the official website of the Securities and Exchange Commission of the United States.
