On Thursday, an investor of crypto miner Argo blockchain instituted a lawsuit against the firm and its executives. According to the filingArgo allegedly published inaccurate statements during its initial public offering (IPO) in 2021 and omitted vital information to deceive investors.
"The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading," the filing read.
The investor, identified as Aaron Murphy, claiming to represent everyone who bought the stock from September 2021 through October 2022, accused Argo and its board members of failing to disclose its vulnerability to capital constraints, electricity costs, and network issues.
Notably, the plaintiff in the lawsuit alleged investors were misled to believe those factors had little or no impact on the survival of the firm. Now, Murphy said he later realized that the business was “less sustainable” as against the earlier statement issued by the firm, which overstated its financial prospects.
Through the filing, Murphy complained about the prevailing financial crisis with Argo, stressing that he would not have purchased or acquired its securities if they knew the truth.
Argo Made $105 Million Through its IPO
In late 2021, the crypto miner filed a report with the United States Securities and Exchange Commission (SEC) regarding its IPO. Following this development, Argo decided to issue about 7.5 million shares to the public. According to reports, it offered the shares at a price of $15 and made gains worth $105 million from the sales.
In 2022, the bear market, which ravaged the crypto sphere, had dire consequences on the mining sector. The period was marked by unprecedented rises in electricity prices, a fall in cryptocurrency prices, and stringent regulations. Due to this development, the Argo share price fell sharply, trading at $0.3 per share in late 2022.
Compiled by Metacrunch. Metacrunch is a news complier and aggregator platform which aims to spread awareness and updates on Metaverse, Web 3.0 Technology, Blockchain, Cryptocurrency, NFTs, Airdrops and many more.
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