A lawsuit has been instituted against Bit Digital Inc. and its executives in New York’s Southern District Court. Claimant alleges fraudulent mining of Bitcoin against the crypto exchange.
Bit Digital Inc. is a crypto exchange specifically for Bitcoin and also engaged in the activities of Bitcoin mining. As per the latest news, it has been confirmed that a lawsuit has been filed against the company in New York’s Southern District Court. In the lawsuit, the claimant has instituted the company, its CEO, and other executives as defendants. It has been alleged by the claimant in the lawsuit that the company is involved in business activities that are totally “fraudulent”. In addition, the suit claims that the company has been actively participating in illegal Bitcoin mining activities.
Bit Digital, which has recently changed its name from Golden Bull Ltd., is a company duly listed at NASDAQ. A research paper compiled by J Capital Research has been annexed in the suit suggesting that Bit Digital is operating a fake crypto trading business. A further allegation was made that the trading platform has been established to steal the funds of the general public/investors.
J Capital’s research report alleges that Bit Digital is lying that its 22,869 Bitcoin miners have been operating in China. J Capital also stated that it contacted respective governments to confirm this fact but the governments did not endorse Bit Digital’s claim. Thereafter, J Capital raised an allegation that they think Bit Digital is lying about its business. The research firm also concluded that Bit Digital’s business is nothing but fraud.
The instant suit has been filed by one of the customers of Bit Digital namely Anthony Pauwels. The plaintiff joined the trading platform of Bit Digital in December and invested in securities supported by Bit Digital. Pauwels alleged that the trading company has been working in violation of the securities laws of the US and Securities & Exchange. He also stated in the suit that Bit Digital’s management made several false statements and concealed certain facts from its customers.
Earlier, when J Capital’s research paper was published, the value of the defendant company’s stocks decreased significantly. Until 11th January, the value of Bit Digital’s share was US$ 18.76 per share. However, as of today the value dropped and reached a point where a share can be bought for US$ 6.27.
Meanwhile, a month ago, Bit Digital claimed that it’s Bitcoin mining setups were spreading over several cities of China. However, the claim of Bit Digital was also found to be incorrect and false. Chinese Authorities confirmed that there were no such Bit Digital’s mining setups in any of the cities referred to by the company.
The suit is currently pending a hearing before the US’s District Court and Bit Digital is required to prove its case. In case the company fails to prove the allegations wrong, then heavy fines will be imposed upon Bit Digital along with its business suspension.