Hut 8 Responds to Reports Criticizing USBTC Merger and Other Activities

The issuer of the report will profit from the drop in the value of Hut 8’s stock.

Bitcoin and digital asset mining company Hut 8 responded to a recent critical report in a Jan. 19 statement.

The mining company wrote:Litecoin DOGE Miner Asic

“Hut 8 Corp is aware of a short-sale report by J Capital Research, a self-proclaimed group of biased activists, who explicitly disclosed that they would profit if the company’s share price fell.”

J Capital’s report criticized, in part, Hut 8’s recent merger with the United States Bitcoin Company (USBTC). It implied that the agreement was the result of a “failed merger process” in which no other party was interested in merging with either company.

Hut 8 did not directly address this part of the report, but responded that its board of directors was “confident in a merger of equals,” adding that it was confident in the company’s balance sheet and future success.

Hut 8 did not mention any other points in the J Capital report, but said it was reviewing the article and would provide more information as needed.

Report Criticizes USBTC and Hut 8

J Capital’s original report accused it of questionable activities, including “undisclosed related parties, a conspiratorial group of stock promoters, and a large number of assets awaiting retirement”.Bitmain Miner

J Capital focused primarily on USBTC rather than Hut 8, claiming ties to two stock promoter groups: the Honig Group and the DesLauriers twins, and it further alluded to the corrupt history of an executive who transitioned from USBTC to Hut 8.

J Capital adds that USBTC’s core assets, which are part of a Texas mining facility it purchased from a bankrupt company called Compute North, have failed to provide the energy and internet connectivity needed for cryptocurrency mining.

J Capital claims that USBTC will enter structural bankruptcy if the merger doesn’t take place, and suggests that USBTC’s true value could be as much as 70% lower than people believe. It warned that USBTC stock was about to be diluted through an expected $200 million fundraising campaign; it also suggested that insiders might soon sell shares for other reasons.

Regarding Hut 8, J Capital highlighted concerns about the company’s suspended North Bay mining facility and past sanctions against the company’s former auditor. It also highlighted Hut 8’s listing on the TSX Venture board known as NEX, which suggests fraud and scamming on the board; NEX’s own website notes that it targets companies that fall below TSX Venture’s listing criteria.

On January 19, the Schall law firm separately announced an investigation into Hut 8. This was triggered by the report and could lead to a class action lawsuit.