Hut 8 will pay $2.35 million to settle a securities class action tied to its 2023 all-stock merger with U.S. Bitcoin Corp., the company disclosed in a filing with the U.S. District Court for the Southern District of New York. The proposed settlement must still be approved by the court.
What the suit alleged
- The lawsuit covered investors who bought Hut 8 securities during the merger-related class period. Plaintiffs claimed Hut 8 and related defendants misled investors about USBTC’s operations and the value of assets folded into the merged company.
- The dispute focused on the King Mountain joint venture in Texas, where USBTC held a 50% interest pre-merger. Plaintiffs said disclosures failed to fully describe energy curtailment and internet connectivity problems at that site.
Legal history and pressure points
- The court previously dismissed parts of the case, tossing Exchange Act claims and certain Securities Act claims tied to USBTC’s pre-merger financial condition. It allowed only the Securities Act claims linked to the King Mountain disclosures to proceed.
- The matter drew further scrutiny after J Capital Research’s January 2024 short report, which questioned USBTC asset values and alleged unreliable power and internet at King Mountain before the merger.
Terms and context of the settlement
- Hut 8 denies any wrongdoing; the settlement filing explicitly states defendants do not admit liability.
- The $2.35 million payment was reached after mediation and acceptance of a mediator’s proposal in May. That figure represents roughly 19.6% of estimated maximum recoverable damages—above the 2025 median (12.9%) and average (14.6%) recoveries for Securities Act-only settlements.
- The filing notes continued litigation carried risks, including planned defendant challenges to traceability because both registered and unregistered shares were issued in the merger and later mixed in the market.
Why it matters now
- The settlement relates to an earlier chapter of Hut 8’s corporate history. The company has since shifted emphasis away from pure Bitcoin mining toward power, compute, AI data centers and high-performance computing.
- crypto.news recently reported Hut 8 signed a 15-year, $9.8 billion lease for a 352-megawatt Texas facility built around NVIDIA’s reference architecture—part of a broader trend of public miners pursuing AI and HPC revenue.
- Hut 8 shares were trading near $121 at the latest check, having climbed substantially over the past year as investors place greater value on AI infrastructure contracts, power access and recurring data center revenue than on mining output alone.
Bottom line for investors
- If approved by the court, the settlement will close one legal issue stemming from the USBTC merger, although it doesn’t resolve broader questions about Hut 8’s strategy. A final settlement hearing will determine whether the proposed deal becomes approved relief for the class.
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