Bitcoin miner Hut 8 has agreed to pay $2.35 million in cash to settle a securities class action. The preliminary settlement motion, filed June 22 in the US District Court for the Southern District of New York, stems from allegations that Hut 8 made misleading statements about operational issues at the King Mountain mining site in Texas and USBTC's financial condition prior to their 2023 merger.
Class Period and Recovery Rate
The proposed settlement covers investors who purchased Hut 8 securities in the US between Feb. 13, 2023, and Jan. 18, 2024. Both parties accepted mediator Jed D. Melnick's proposal on May 13, 2026. Court filings show the $2.35 million represents roughly 19.6% of the estimated maximum recoverable damages of $12.08 million, exceeding both the median and average recovery rates for Securities Act-only cases reported in 2025.
Dispute Focused on King Mountain Disclosures
The litigation consolidated complaints filed in February and March 2024. Plaintiffs alleged Hut 8 violated the Securities Act of 1933 and the Securities Exchange Act of 1934 by failing to disclose energy and internet problems at the King Mountain facility (operated by US Data Mining Group) and USBTC's financial health before the merger. In September 2025, the court dismissed all Exchange Act claims and Securities Act claims tied to USBTC's finances but allowed claims concerning risk disclosures about the King Mountain facility and the Texas ERCOT power grid to proceed.
Settlement Terms and Firm's Pivot
A full-day virtual mediation session on May 7, 2026, ended without a deal, but the mediator later issued a proposal accepted by both sides. Hut 8 denies any wrongdoing. Lead counsel Pomerantz LLP plans to seek attorneys' fees of up to one-third of the settlement fund, plus interest, and a service award of up to $10,000 for the lead plaintiff. Separately, Hut 8 continues diversifying: in December 2025 it signed a 15-year lease valued at roughly $7 billion with AI cloud platform Fluidstack to develop a 245-megawatt AI data center at its River Bend campus, with Google providing a financial backstop; in January 2026, it expanded its Coinbase credit facility to $200 million for general corporate purposes.