Hut 8 to pay $2.35 million to settle USBTC merger investor suit

Hut 8 has agreed to pay $2.35 million to settle a securities class action tied to its 2023 all-stock merger with U.S. Bitcoin Corp. 

The proposed settlement was filed in the U.S. District Court for the Southern District of New York and still needs court approval.

The case covered investors who bought or acquired Hut 8 securities during the class period linked to the merger. Plaintiffs alleged that Hut 8 and related defendants misled investors about USBTC’s operations and the value of assets brought into the combined company.

King Mountain allegations remain central

The dispute centered on the King Mountain joint venture in Texas, where USBTC held a 50% interest before the merger. Investors alleged that disclosures did not fully describe energy curtailment and internet connectivity issues at the site.

The court earlier dismissed parts of the case, including Exchange Act claims and Securities Act claims tied to USBTC’s alleged financial condition before the merger. However, the court allowed Securities Act claims tied to alleged King Mountain disclosures to move forward.

J Capital Research’s January 2024 short-seller report added pressure to the dispute. The report questioned the value of USBTC assets and said King Mountain lacked reliable power and high-speed internet access at key points before the merger.

Hut 8 denies liability

The line is central to the agreement. Hut 8 is paying to resolve the case, but the settlement does not include an admission of wrongdoing. The filing also says the parties reached the amount after mediation and accepted a mediator’s proposal in May.

The proposed $2.35 million payment represents about 19.6% of estimated maximum recoverable damages. The filing said that level is above the 12.9% median and 14.6% average recovery for Securities Act-only settlements in 2025.

The filing also notes that continued litigation carried risk. Defendants had planned to challenge traceability because registered and unregistered shares were issued through the merger and later mixed in the market.

AI pivot changes Hut 8 story

The settlement relates to a prior period in Hut 8’s merger history. The company’s current market story has shifted toward power, compute, AI data centers and high-performance computing, while Bitcoin mining plays a smaller role.

crypto.news recently reported that Hut 8 signed a 15-year, $9.8 billion lease for a 352-megawatt Texas facility built around NVIDIA’s reference architecture. That report framed Hut 8 as part of a wider shift where public Bitcoin miners are seeking AI and HPC revenue.

Hut 8 shares traded near $121 at the latest market check. The stock has climbed sharply over the past year as investors value AI infrastructure contracts, power access and long-term data center revenue more heavily than mining output alone.

For investors, the settlement closes one legal issue tied to the USBTC merger, subject to court approval. It does not resolve every debate around Hut 8’s business model, but it narrows one court dispute as the company pursues a broader data center strategy. The final settlement hearing will decide whether the deal moves from proposed terms to approved relief for the class.