Argo Blockchain Encountered Class Action Lawsuit: Troubles Multiplied

A recent class action lawsuit intensified the troubles for the cryptocurrency mining firm. The firm’s investors filed a class action lawsuit on January 26, accusing miners of making traitorous statements and concealing important data.

“The Offering Documents were negligently prepared,” the lawsuit says.

It further claims that the documents are either dubious or exclude the facts required to make the statements nondeceptive. Thus, compromising the integrity of the case.

The plaintiff accused the offering documents failed to disclose the liabilities and the adverse circumstances. 

“Argo was highly susceptible to and/or suffered from significant capital constraints, electricity and other costs, and network difficulties.”

The foregoing issues hampered the Firm’s ability to mine bitcoin and execute its business strategies, making it more unsustainable than the defendants had led investors to believe. The Firm overstated financial prospects.

The complaint noted, “Had (the investors) known the truth, they would not have purchased or otherwise acquired said securities, or would not have purchased or otherwise acquired them at the inflated prices that were paid.”

Argo released the information in question on September 23, 2021, when the Firm filed documents relating to its IPO with the United States Securities and Exchange Commission (SEC).

7.5 million shares were initially offered at $15 each, which would have resulted in proceedings of another $105 million before expenses. 

Maybe due to this, the miner’s share price took a hit and was currently trading at $1.96 per share, which went to as low as $0.36 per share.

The investors has filed the complaint days after Agro Blockchain announced that on January 13, the company had regained compliance with Nasdaq listing rule 5450 (a) (1).

On December 16, 2022, the Nasdaq stock market notified the Firm to maintain the minimum closing bid price worth $1 for 10 days, which the Firm failed to maintain for the past 30 days. However, later on, the Firm had to momentarily suspend trading on Nasdaq due to the escalating energy cost and deflating BTC prices.

Argo Blockchain sold its mining facility. 

Peter Wall, CEO of Argo Blockchain, has announced a deal made with Mike Novogratz’s crypto investment firm Galaxy Digital. The crypto mining firm has sold flagship Helios, the Firm’s top mining facility, for $65 million to Galaxy Digital and has abated its total debt by $41 million. 

Additionally, the crypto mining firm got a loan worth $35 million from Galaxy Digital, with the expectation of debt reduction.

Agro has taken some difficult steps to ease the issues faced by the Firm and their crypto miners. One of them was selling its top financial facility.