Hut 8 Corp (Nasdaq: HUT), the energy infrastructure and former Bitcoin mining company, has agreed to pay $2.35 million in cash to settle a securities class action lawsuit brought by investors who alleged they were misled during the company’s 2023 merger with U.S. Data Mining Group, Inc., doing business as US Bitcoin Corp (USBTC).
The settlement details were laid out in a memorandum of law filed on June 22, 2026, in the U.S. District Court for the Southern District of New York before Judge Victor Marrero.
What did the lawsuit allege?
The original complaint was filed on February 7, 2024, and centered on Hut 8’s all-stock merger with USBTC, which closed in November 2023. Investors claimed that Hut 8 made materially misleading statements about the transaction’s benefits while failing to disclose persistent energy curtailment and internet connectivity problems at the King Mountain joint venture, a Texas-based Bitcoin mining operation in which USBTC held a 50% interest.
Specifically, the surviving claims focused on two risk disclosures in Hut 8’s registration statement and prospectus that investors argued were misleading. These statements acknowledged generic risks around grid reliability and internet disruptions but allegedly downplayed the severity and ongoing nature of the issues already affecting the King Mountain site.
The court partially sided with investors when it ruled on the motion to dismiss in September 2025. While the Exchange Act claims and certain Securities Act claims were thrown out, the court sustained the Securities Act claims related to the King Mountain disclosures.
The case gained significant traction after short seller J Capital Research published a critical report on Hut 8 in January 2024. That report prompted a sharp selloff, with Hut 8 shares dropping more than 23% following its release. The decline formed a key part of the alleged damages investors sought in the litigation.
How the settlement was reached
According to the court filing, the parties participated in a full-day virtual mediation on May 7, 2026, overseen by Jed D. Melnick, an experienced JAMS mediator. The session ended without a deal, but Mr. Melnick subsequently issued a mediator’s proposal of $2,350,000, which both sides accepted on May 13, 2026.
Lead Plaintiff Abhishek Maheshwari is represented by Pomerantz LLP, which serves as Lead Counsel. Bronstein, Gewirtz & Grossman, LLC is serving as additional counsel.
Before settling, Lead Counsel conducted a comprehensive investigation, drafted an amended complaint, partially defeated Defendants’ motion to dismiss, and exchanged detailed mediation briefing on the strengths and weaknesses of the claims.
Defendants had also indicated they planned to challenge traceability on the pleadings, arguing that unregistered shares issued to Legacy Hut shareholders were commingled with registered shares issued to USBTC shareholders, making it nearly impossible to trace aftermarket purchases back to the registration statement.
Settlement recovery exceeds industry averages
Lead Counsel’s damages expert estimated maximum recoverable damages at approximately $12.08 million. The $2.35 million settlement therefore represents a recovery rate of about 19.6%, which sits well above the 12.9% median and 14.6% average recovery rates for cases with Securities Act-only claims in 2025, according to a Cornerstone Research report cited in the filing.
The settlement class covers all persons and entities that purchased or acquired Hut 8 securities in the United States or on a U.S.-based exchange between February 13, 2023, and January 18, 2024. Claims administration will be handled by Strategic Claims Services (SCS), and Lead Counsel intends to seek attorneys’ fees not exceeding 33.3% of the settlement fund.
As part of the agreement, Hut 8 continues to deny that it engaged in any misconduct or violated the law, and denies that investors suffered any damages as a result of its conduct. The stipulation includes a no-admission-of-liability clause, which is standard in securities class action settlements.
Where Hut 8 stands today
Hut 8 has undergone a major transformation since the events at the center of this lawsuit. The company has pivoted heavily toward AI data centers and high-performance computing infrastructure. In December 2025, Hut 8 signed a $7 billion, 15-year lease for an AI data center campus in Louisiana backed by Google. More recently, the company closed a $4.25 billion Texas data center bond in June 2026.
Hut 8 shares were trading around $125.99 as of June 22, 2026, up from a 52-week low of $15.26. The stock has gained more than 640% over the past year.
A related action on behalf of Canadian investors was also filed in the Ontario Superior Court of Justice in December 2025.
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