Hut 8, a Bitcoin mining company, has conveyed its strong belief in its recent collaboration with USBTC, despite the release of a contentious report by JCapital Research that cautioned investors about potential risks.
In a concise response dated January 19th, the company acknowledged the report and pledged to provide any necessary updates in response to concerns raised within the broader digital asset community via social media platforms.
“(Hut 8) is aware of a report released on January 18th by J Capital Research, a group openly stating their biased stance and financial incentive tied to a company’s stock price decline. Hut 8 is currently examining the report and will share updates as deemed appropriate by the company.”
The Canadian mining firm expressed unwavering confidence in its current management team and board of directors following the merger, asserting that this partnership would drive growth for all shareholders.
In response to the report’s scrutiny of financial activities related to the merger, the official statement reassured the community about the merger’s robustness and the company’s strong financial position.
J Capital’s revelation stuns the market
On January 18th, the cryptocurrency market was rocked by a report that leveled accusations against the Bitcoin miner involved in a recent merger with USBTC, suggesting potential risks for investors.
The report alleges that the Bitcoin miner engaged in questionable practices, including concealing stock ownership in what appears to be a pump-and-dump scheme. It claims that the shares held by the largest shareholders are obscured through an undisclosed related party.
Regarding the financial aspect, the report asserts that the company inherited a substantial debt burden from the merger and paid more than the value of the company’s assets. This allegedly occurred as USBTC faced challenges with its miners, and its primary equipment was not operating at optimal capacity.
Moreover, an insider reportedly disclosed that USBTC was on the verge of bankruptcy and viewed the merger as a lifeline. There are also claims of associations with promoters who have faced legal charges from the Securities and Exchange Commission (SEC).
The report concludes with a pessimistic outlook, suggesting that shareholders of the Bitcoin miner may experience the consequences of an over-leveraged pump-and-dump scheme, ultimately holding an inefficient Bitcoin mining operation that remains unprofitable even at Bitcoin prices exceeding $60,000.
In response to these allegations, the miner’s stock price plummeted by 23.49%, with traders reacting anxiously to the pump-and-dump accusations. As of the current moment, the asset has seen a further decline of 3.85% in the past 24 hours, trading at $6.92.
While the report prompted panic among some cryptocurrency users, others have chosen to dismiss it, supporting the company’s plans for expansion in anticipation of the upcoming halving event.
