A United States District Court judge has dismissed a class-action lawsuit brought by investors in Bitcoin miner Iris Energy, who alleged the mining firm concealed key risks and misled investors during its initial public offering in 2021.
In a Sept. 27 opinion order, US District Court Judge Jamel Semper dismissed the class-action lawsuit without prejudice, ruling that the investors who brought the lawsuit could not prove that IREN had ever falsified statements or intentionally misled investors.
A District Court judge dismissed a class-action suit against IREN (formerly Iris Energy). Source: Justia
The lawsuit alleged Iris Energy, its executives, and its underwriters — which include J.P. Morgan and Citigroup Global Markets — violated both the Securities Act and the Securities Exchange Act during its 2021 initial public offering.
The plaintiffs claimed several key inaccuracies were in documents concerning the Australia-based crypto miner’s November 2021 IPO and several other statements in the months that followed.
Additionally, they alleged that IREN had concealed risks and failed to disclose information regarding loans it took on to finance mining equipment and had made several “false and misleading” statements concerning the firm’s overall financial condition, including its profits, losses, and assets on hand.
However, Judge Semper found that Iris had no duty to disclose all details concerning its loan financing and that the plaintiffs had failed to prove there was anything materially misleading about Iris’ disclosures.
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Iris Energy (IREN) went public on Nov. 17, 2021, after raising $232 million through an IPO. After debuting at a share price of $28, the firm’s share price tumbled quickly amid a broader sell-off throughout the rest crypto market.
By Jan. 24, 2022, IREN’s share price had plummeted 69% alongside a similar decline in the price of Bitcoin (BTC), which fell more than 36% in the same timeframe.
The price of Iris Energy (IREN) shares fell alongside a wider crypto market downturn. Source: TradingView
In a Sept. 30 statement concerning the dismissal, Davis Polks — the firm representing Iris Energy and its executives — said the plaintiffs had “sought to recover for their losses during the broad, marketwide decline in the value of Bitcoin in 2022.”
Separate from the class action suit, Iris Energy was recently targeted by short-selling firm Culper Research, which accused the Bitcoin miner of being “wildly overvalued,” adding that the firm wasn’t investing enough to remain competitive in the high-performance computing (HPC) industry.
Culper — which disclosed its short-selling position on IREN — accused the company of talking “big game” about its high-performance computing plans while investing far less than required.
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