Sin binned bitcoin miner Iris Energy faces a potential US class action over allegations it misled investors and overstated its financial position in a November 2021 initial public offer that raised $US232 million from investors now wearing losses of 94 per cent.
The potential legal action crowns a catastrophic fall for Iris, which previously managed to attract an A-list of high-profile Australian investors, including In the statement, Iris said its subsidiaries won’t make principal repayments due on the outstanding loans as the bitcoin mining equipment produces insufficient cash flow to service their respective debt financing obligations.Iris also said its debtors are wholly owned subsidiaries which are legally structured as special purpose vehicles , which means the creditor New York Digital Investment Group has no financial recourse over parent company Iris Energy.
The stock plunged 18 per cent to $US1.55 on the news, with Pomerantz publicising its potential claim for significant financial compensation the same day. The law firm has prepared a draft court claim against Iris seen by theBitcoin miners like Iris and fellow Australian-player Mawson Infrastructure now operate in a tough environment, with horror headlines over bankruptcies, plunging bitcoin prices, and soaring energy bills pressuring their unit economics.
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Source: FinancialReview - 🏆 2. / 90 Read more »