2024

Bitcoin

Bitcoin miner Hut 8 has been accused of hiding stock ownership in a perceived pump-and-dump scheme. The accusation comes from an unconfirmed report by JCapital Research.&nbsp;In a Jan 18 release, the <a href="https://www.jcapitalresearch.com/uploads/2/0/0/3/20032477/2024_01_18_hut.pdf">firm leveled accusations</a> against the Bitcoin miner stemming from its recent partnership with US Bitcoin (USBTC) warning investors of potential trouble. 
<a href="https://twitter.com/search?q=%24HUT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$HUT</a> The J Capital Research report raises serious concerns about the merger of Hut 8 and U.S. Bitcoin Corp. (USBTC), now trading as "New Hut" on Nasdaq as <a href="https://twitter.com/search?q=%24HUT&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$HUT</a>. <a href="https://t.co/qSdinZxh6q">https://t.co/qSdinZxh6q</a> 
— yvsx (@yvsx) <a href="https://twitter.com/yvsx/status/1748037416370278861?ref_src=twsrc%5Etfw">January 18, 2024</a> 
The firm claims that USBTC promoters have a history of legal trouble. Additionally, accusers say the company has previously defaulted on loan payments and paid fines on two separate occasions.&nbsp; 
What’s more, the firm alleged that the company’s management hides stock ownership of the largest shareholders through an undisclosed related party.&nbsp; 
On Nov 30, the <a href="https://cryptonews.com/news/bitcoin-miners-hut-8-and-usbtc-complete-merger-forming-new-hut-8-corp-for-upcoming-halving.htm">Canadian miners announced</a> the partnership with USBTC creating a new business partnership described as the biggest M&amp;A transaction to have transpired within the digital asset industry as the CEO of HUT 8 Jamie Laverton expressed optimism.&nbsp; 
The move created New Hut under the trading ticker TSE:HUT and its price plummeted over 20% after the release of the report by JCapital.&nbsp; 
<h2 id="allegations-of-a-pump-and-dump-scheme">Allegations of a pump and dump scheme&nbsp;</h2> 
According to the report, Hut 8 inherited a huge debt from the merger with other flagged details that concluded it was a pump-and-dumps&nbsp;target.&nbsp;An insider revealed that the merger was a “godsend” for USBTC as the company would have gone bankrupt within weeks after the company lost about 50% of its miners in addition to other assets. The report added: 
“Our interviewee said that USBTC “begged” NYDIG to forgive the loan but soon after Christ-mas was forced to surrender assets. Hut 8 managed to characterize this default as a $23.7 mln GAIN on debt extinguishment. But it had started as a $24.2 mln LOSS that the company “fixed” through an accounting sleight of hand. Abracadabra!”&nbsp; 
Furthermore, the company states that the value of USBTC was 70% less meaning HUT 8 paid way more than expected. This is because the main asset of USBTC is not operating at optimal capacity to mine more Bitcoin.&nbsp;The co-founders also locked up a fraction of their shares in the company alongside claims of promoters linked with fraud claims including charges from the Securities and Exchange Commission (SEC).&nbsp; 
“Ultimately, we strongly believe that [HUT} shareholders are likely to feel the pain of being on the wrong side of an over-levered pump-and-dump, only to be left holding the most inefficient Bitcoin miner, which is unprofitable even at a Bitcoin price of over $60,000.”&nbsp; 
At press time, Hut 8 is <a href="https://www.google.com/finance/quote/HUT:TSE?sa=X&amp;ved=2ahUKEwit36ako-mDAxV7QEEAHV4kAfkQ3ecFegQIEhAc">down by 23.49%</a> due to the report although the broader markets face a correction which has led to reduced miner prices. Marathon Digital (MARA) is <a href="https://www.google.com/finance/quote/MARA:NASDAQ?sa=X&amp;ved=2ahUKEwjx68e0o-mDAxWWSEEAHXpoBw0Q3ecFegQIIBAc">down by 6.89%</a> while&nbsp; Riot Platforms has plummeted by 4.97%.

Bitcoin Miner Hut 8 Accused of a Pump and Dump Scheme, HUT Shares Plummet

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