Hut 8 responds to reports criticizing the USBTC merger and other activities.
Bitcoin and digital asset mining company Hut 8 responded to the recent critical report with a statement on January 19.
The mining company wrote:
“Hut 8 Corp is aware of a short report from J Capital Research, a self-described biased activist group, that clearly states that it stands to profit if the company’s stock price falls.”
J Capital’s report partially criticized Hut 8’s recent merger with US Bitcoin Corp (USBTC). It was suggested that the agreement stemmed from a ‘failed merger process’ in which neither party was interested in merging with the two companies.
Hut 8 responded by saying the board had “confidence in a merger of equals”, without directly addressing that part of the report. Hut 8 added that the board remains confident in the company’s balance sheet and future success.
Hut 8 did not mention anything else in J Capital’s report, but said it was reviewing the article and would provide more information as needed.
The report criticized both USBTC and Hut 8.
J Capital’s original report alleged suspicious activities involving “undisclosed related parties, a cabal of stock promoters and a number of dead assets.”
In relation to USBTC rather than Hut 8, J Capital has alleged links to two groups of stock promoters: the Honig group and the DesLauriers twins. It also hinted at a history of corruption among USBTC-turned-Hut 8 executives.
J Capital added that USBTC’s core assets, part of a Texas-based mining facility it purchased from a bankrupt company called Compute North, failed to provide the energy and internet connectivity needed to mine the cryptocurrency.
J Capital argued that without the merger USBTC would have entered structured bankruptcy and said USBTC’s actual value could be 70% lower than expected. Warned of looming dilution of USBTC stock with expected $200 million fundraiser. We also believe insiders may soon sell shares for other reasons.
Regarding Hut 8, J Capital highlighted the company’s discontinued North Bay mining facility and past sanctions against the company’s former auditor. It also highlighted Hut 8’s listing on a TSX Venture board called NEX, which hints at host fraud and fraud. NEX’s own site states that it targets companies below the TSX Venture’s listing standards.
Schall Law Firm separately announced an investigation into Hut8 on January 19. This was triggered by the report and could lead to a class action lawsuit.
