{"cached_at":"2026-10-30T10:47:42.556665+00:00","cl_docket_id":"68307680","docket":{"resource_uri":"https://www.courtlistener.com/api/rest/v4/dockets/68307680/","id":68307680,"court":"https://www.courtlistener.com/api/rest/v4/courts/nysd/","court_id":"nysd","original_court_info":null,"idb_data":null,"clusters":[],"audio_files":[],"assigned_to":"https://www.courtlistener.com/api/rest/v4/people/2045/","referred_to":null,"bankruptcy_information":null,"absolute_url":"/docket/68307680/latino-v-hut-8-corp/","date_created":"2024-03-04T13:10:31.714040-08:00","date_modified":"2026-09-01T18:19:34.129899-07:00","source":1,"appeal_from_str":"","assigned_to_str":"Victor Marrero","referred_to_str":"","panel_str":"","date_last_index":"2024-04-10T03:54:11.069728-07:00","date_cert_granted":null,"date_cert_denied":null,"date_argued":null,"date_reargued":null,"date_reargument_denied":null,"date_filed":"2024-03-04","date_terminated":"2024-03-15","date_last_filing":"2026-07-14","case_name_short":"Latino","case_name":"Latino v. Hut 8 Corp.","case_name_full":"","slug":"latino-v-hut-8-corp","docket_number":"1:24-cv-01636","docket_number_core":"2401636","docket_number_raw":"1:24-cv-01636","docket_number_source":0,"federal_dn_office_code":"1","federal_dn_case_type":"cv","federal_dn_judge_initials_assigned":"VM","federal_dn_judge_initials_referred":"","federal_defendant_number":null,"pacer_case_id":"616802","cause":"15:78m(a) Securities Exchange Act","nature_of_suit":"Securities/Commodities","jury_demand":"","jurisdiction_type":"","appellate_fee_status":"","appellate_case_type_information":"","mdl_status":"","filepath_ia":"","filepath_ia_json":"","ia_upload_failure_count":null,"ia_needs_upload":true,"ia_date_first_change":"2024-03-04T13:10:31.704218-08:00","date_blocked":null,"blocked":false,"appeal_from":null,"parent_docket":null,"tags":[],"panel":[]},"parties":[],"entries":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/470785692/","id":470785692,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68307680/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/486173600/","id":486173600,"tags":[],"absolute_url":"/docket/68307680/11/latino-v-hut-8-corp/","date_created":"2026-07-14T11:12:08.468282-07:00","date_modified":"2026-09-01T18:19:34.208788-07:00","sha1":"75489080430019249eb35145b581a8d7b23d1f66","page_count":1,"file_size":142738,"filepath_local":"recap/gov.uscourts.nysd.616802/gov.uscourts.nysd.616802.11.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.616802/gov.uscourts.nysd.616802.11.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:24-cv-01636-VM Document 11 Filed 07/13/26 Page 1 of 1\n\n\n 7/13/26\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n\nIN RE HUT 8 CORP. SECURITIES\nLITIGATION\n\n 24 Civ. 904 (VM)\nTHIS DOCUMENT RELATES TO ALL ACTIONS\n ORDER\n\n\nVICTOR MARRERO, United States District Judge.\n\n The Court\u2019s Order granting the unopposed motion for\n\npreliminary approval of the class action settlement (Dkt. No.\n\n80) contained a mistake as to the time of the Settlement\n\nHearing. The Settlement Hearing, to be held before the Court\n\npursuant to Federal Rule of Civil Procedure 23(e), is hereby\n\nscheduled for November 6, 2026, at 1:00 p.m.\n\n\n\nSO ORDERED.\n\nDated: 13 July 2026\n New York, New York\n\n _________________________\n Victor Marrero\n U.S.D.J.\n\f","ocr_status":2,"date_upload":"2026-08-27T05:27:52.803185-07:00","document_number":"11","attachment_number":null,"pacer_doc_id":"127039968839","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Order AND ~Util - Set Hearings","acms_document_guid":""}],"date_created":"2026-07-14T11:12:08.412199-07:00","date_modified":"2026-09-01T18:19:34.197936-07:00","date_filed":"2026-07-13","time_filed":"12:33:49","entry_number":11,"recap_sequence_number":"2026-07-14.001","pacer_sequence_number":52,"description":" ORDER: The Court's Order granting the unopposed motion forpreliminary approval of the class action settlement (Dkt. No.80) contained a mistake as to the time of the SettlementHearing. The Settlement Hearing, to be held before the Courtpursuant to Federal Rule of Civil Procedure 23(e), is herebyscheduled for November 6, 2026, at 1:00 p.m.SO ORDERED. (Settlement Conference set for 11/6/2026 at 01:00 PM before Judge Victor Marrero.) (Signed by Judge Victor Marrero on 7/13/2026) (jca)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/470170056/","id":470170056,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68307680/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/485534060/","id":485534060,"tags":[],"absolute_url":"/docket/68307680/10/latino-v-hut-8-corp/","date_created":"2026-07-08T15:11:34.340371-07:00","date_modified":"2026-08-21T21:30:21.116588-07:00","sha1":"06bae1f1c14199a1c12c04404bac7e7de2074800","page_count":17,"file_size":752831,"filepath_local":"recap/gov.uscourts.nysd.616802/gov.uscourts.nysd.616802.10.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.616802/gov.uscourts.nysd.616802.10.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 1 of 17\n\n\n 7/8/26\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n IN RE HUT 8 CORP. SECURITIES Case No. 1:24-cv-00904-VM\n LITIGATION\n CLASS ACTION\n\n THIS DOCUMENT RELATES TO:\n\n ALL ACTIONS\n\n\n ORDER GRANTING PRELIMINARY APPROVAL OF CLASS ACTION\n SETTLEMENT, APPROVING FORM AND MANNER OF NOTICE, AND SETTING\n DATE FOR HEARING ON FINAL APPROVAL OF SETTLEMENT\n\n WHEREAS:\n\n A. On June 18, 2026, Lead Plaintiff Abhishek Maheshwari (\n\nhimself and all other members of the Settlement Class (defined below) and Defendants Hut 8 Corp.\n\n Hut 8 and Asher Genoot, Michael Ho, Jaime Leverton, and Shenif Visram (together, the\n\n\n\n and Agreement\n\nabove-\n\nRules of Civil Procedure, and which, together with the exhibits thereto, sets forth the terms and\n\nconditions of the proposed settlement of the Action\n\nthe Defendants and Released Defendant Parties on the merits and with prejudice (the\n\n\n\n B. The Court has reviewed and considered the Stipulation and the accompanying\n\nexhibits;\n\n C. The Parties to the Stipulation have consented to the entry of this order; and\n\n\n\n\n 1\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 2 of 17\n\n\n\n\n D. All capitalized terms used in this order that are not otherwise defined herein have\n\nthe meanings defined in the Stipulation.\n\n NOW, THEREFORE, IT IS HEREBY ORDERED, this 8th day of July,\n\n2026, that:\n\n 1. The Court has reviewed the Stipulation, preliminarily approves the Settlement, and\n\nfinds, pursuant to Federal Rule of Civil Procedure 23(e)(1), that the Court will likely be able to\n\nfinally approve the proposed Settlement as fair, reasonable, and adequate to the Settlement Class\n\nunder Federal Rule of Civil Procedure 23(e)(2), subject to further consideration at the Settlement\n\nHearing described below.\n\n 2. Pursuant to Rule 23(a) and (b)(3) of the Federal Rules of Civil Procedure, the Court\n\npreliminarily certifies, for purposes of the Settlement only, the Settlement Class of: all persons and\n\nentities that purchased or otherwise acquired Hut 8 securities in the United States or on an\n\nexchange based in the United States between February 13, 2023 and January 18, 2024, inclusive,\n\nand who were allegedly damaged thereby. Excluded from the Settlement Class are Defendants, the\n\nofficers and directors of Hut 8 at all relevant times, members of their Immediate Family and their\n\nlegal representatives, heirs, successors, or assigns, and any entity in which Defendants have or had\n\na controlling interest. Also excluded from the Settlement Class are any persons or entities who or\n\nwhich timely and validly exclude themselves from the Settlement Class.\n\n 3. Solely for the purposes of effectuating the proposed Settlement of this Action, the\n\nCourt finds and preliminarily concludes that the prerequisites of class action certification under\n\nRules 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure have been satisfied for the\n\nSettlement Class defined herein and for the purposes of the Settlement only, in that:\n\n\n\n\n 2\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 3 of 17\n\n\n\n\n (a) the members of the Settlement Class are so numerous that joinder of all\n\nSettlement Class Members is impracticable;\n\n (b) there are questions of law and fact common to the Settlement Class\n\nMembers;\n\n (c)\n\n (d) Plaintiff and Lead Counsel have fairly and adequately represented and\n\nprotected, and will fairly and adequately represent and protect, the interests of the Settlement\n\nClass;\n\n (e) the questions of law and fact common to Settlement Class Members\n\npredominate over any individual questions; and\n\n (f) a class action is superior to other available methods for the fair and efficient\n\nadjudication of the controversy.\n\n 4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for purposes of\n\nthe Settlement only, Plaintiff is preliminarily certified as Class Representative for the Settlement\n\nClass. The law firm of Pomerantz LLP is preliminarily appointed Class Counsel for the Settlement\n\nClass.\n\n 5. -length\n\nnegotiations overseen by an experienced mediator and (b) the Stipulation is sufficiently fair,\n\nreasonable, and adequate to the Settlement Class to warrant providing notice of the Settlement to\n\nSettlement Class Members and holding the Settlement Hearing.\n\n 6. The Settlement Hearing, to be held before the Court pursuant to Rule 23(e) of the\n\nFederal Rules of Civil Procedure,\n\ndiscretion, at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York,\n\n\n\n\n 3\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 4 of 17\n\n\n\n\nNY 10007, in Courtroom 15B, on November 6, 2026, at 11:00 p.m. [a date at least 100 days\n\nfrom entry of this order] for the following purposes:\n\n (a) to determine whether the proposed Settlement is fair, reasonable, and\n\nadequate, and should be finally approved by the Court;\n\n (b)\n\nas provided under the Stipulation should be entered, and to determine whether the release by the\n\n hould be\n\nprovided to the Released Defendant Parties;\n\n (c) to determine, for purposes of the Settlement only, whether the Settlement\n\nClass should be finally certified; whether Plaintiff should be finally certified as Class\n\nRepresentative for the Settlement Class; and whether the law firm of Pomerantz LLP should be\n\nfinally appointed as Class Counsel for the Settlement Class;\n\n (d) to determine whether the proposed Plan of Allocation for the proceeds of\n\nthe Settlement is fair and reasonable and should be approved by the Court;\n\n (e)\n\nLitigation Expenses (which may include an application for an award to Plaintiff for reimbursement\n\nof his reasonable costs and expenses directly related to his representation of the Settlement Class,\n\n\n\n (f) to rule upon such other matters as the Court may deem appropriate.\n\n 7. The Court reserves the right to approve the Settlement with or without modification\n\nand with or without further notice to the Settlement Class. The Court further reserves the right to\n\nenter the Judgment approving the Settlement and dismissing the Action on the merits and with\n\nprejudice,\n\n\n\n\n 4\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 5 of 17\n\n\n\n\nand/or Litigation Expenses. The Court may also adjourn the Settlement Hearing, decide to hold\n\nthe hearing remotely, or modify any of the dates herein without further individual notice to\n\nmembers of the Settlement Class. Any such changes shall be posted on the website for the\n\nSettlement.\n\n 8. The Court approves the form, substance, and requirements of the Notice of\n\n Litigation\n\n , the Proof of Claim and Release form , the Summary\n\nNotice of Pendency of Class Action, Proposed Settlement,\n\nLitigation , and the Postcard Notice, substantially in the forms\n\nannexed hereto as Exhibits 1, 2, 3, and 4, respectively, and finds that the mailing and distribution\n\nof the Postcard Notice and publishing of the Notice, Summary Notice, and Claim Form\n\nsubstantially in the manner and form set forth in this Order: (a) constitute the best notice to\n\nSettlement Class Members practicable under the circumstances; (b) are reasonably calculated,\n\nunder the circumstances, to describe the terms and effect of the Settlement and to apprise\n\nSettlement Class Members of their right to object to the proposed Settlement or to exclude\n\nthemselves from the Settlement Class; (c) are reasonable and constitute due, adequate, and\n\nsufficient notice to all Persons entitled to receive such notice; and (d) satisfy all applicable\n\nrequirements of the Federal Rules of Civil Procedure (including Rules 23(c) (e)), the Due Process\n\nClause of the United States Constitution, and 15 U.S.C. \u00a7 77z-1(a)(7) and 15 U.S.C. \u00a7 78u-4(a)(7),\n\nas amended by the PSLRA.\n\n 9. The Court approves the retention of and appoints Strategic Claims Services\n\n as the Claims Administrator to supervise and administer the notice procedure as well as\n\nthe processing of claims.\n\n\n\n\n 5\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 6 of 17\n\n\n\n\n 10. No later than thirty (30) calendar days following the later of (i) entry of this\n\n\n\ninformation necessary to effectuate the payment of the Settlement Amount (e.g., a W-9, wiring\n\ninstructions, contact information for escrow agent to confirm wiring details, details if paying by\n\ncheck, completion of any verification forms reasonably required by the payors), Defendants shall\n\npay or cause the payment of $2,350,000 in cash into an interest-bearing escrow account specified\n\nby Lead Counsel.\n\n 11. At any time after entry of this Order, Lead Counsel may, without further approval\n\nfrom the Court or Defendants, disburse up to two hundred and fifty thousand U.S. dollars and zero\n\ncents ($250,000.00) from the Settlement Fund to pay reasonable and necessary Notice and\n\nAdministration Costs prior to the Effective Date. After the Effective Date, additional amounts may\n\nbe transferred from the Settlement Fund for Lead Counsel to pay additional reasonable and\n\nnecessary Notice and Administration Costs actually incurred and paid or payable without further\n\norder of this Court. Unless otherwise provided, all fees, costs, and expenses incurred in identifying\n\nand notifying Settlement Class Members shall be paid from the Settlement Fund and in no event\n\nshall any of the Released Defendant Parties bear any responsibility, liability or obligation for such\n\nfees, costs, or expenses.\n\n 12. Within five (5) business days of entry of this Order, Hut 8 will, at its own expense,\n\nprovide or cause to be provided to Lead Counsel a list (consisting of names, mailing addresses,\n\nand email addresses, if available) in electronic format, such as Excel, of known, registered\n\nshareholders of record during the Settlement Class Period. Plaintiff and the Claims Administrator\n\nagree to maintain the list or lists provided pursuant to this Paragraph 12 in confidence and use it\n\nonly for the purpose of administering the Settlement.\n\n\n\n\n 6\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 7 of 17\n\n\n\n\n 13. Within thirty (30) calendar days after entry of this Preliminary Approval Order, the\n\nClaims Administrator shall cause the Postcard Notice, substantially in the form annexed hereto, to\n\nbe mailed, by first-class mail, postage prepaid, to all Settlement Class Members who can be\n\nidentified with reasonable effort .\n\n 14. The Claims Administrator also shall cause the Stipulation and its exhibits, including\n\nthe Preliminary Approval Order, the Notice, and Claim Form, to be posted on a website to be\n\ndeveloped for the Settlement, from which the Notice and Claim Form can be downloaded, within\n\nthirty (30) calendar days after entry of this Preliminary Approval Order.\n\n 15. The Claims Administrator shall use reasonable efforts to give notice to nominee\n\npurchasers such as custodians, brokerage firms, and other Persons and entities that purchased or\n\notherwise acquired Hut 8 securities during the Settlement Class Period for the benefit of another\n\nPerson or entity. Such nominees shall, within seven (7) calendar days of receipt of the notice:\n\n(a) provide a list of the names, addresses, and email addresses (to the extent that email addresses\n\nare available) of all such beneficial owners to the Claims Administrator, and the Claims\n\nAdministrator is ordered to promptly mail the Postcard Notice and/or email the link to the Notice\n\nand Claim Form to such identified beneficial owners; (b) request from the Claims Administrator\n\nthe link to the electronic Notice and Claim Form and, within seven (7) calendar days of receipt of\n\nthe link, email it to all such beneficial owners; or (c) request from the Claims Administrator\n\nsufficient copies of the Postcard Notice to forward to all such beneficial owners and, within seven\n\n(7) calendar days of receipt of those Postcard Notices from the Claims Administrator, forward\n\nthem to all such beneficial owners. Nominees who elect to send the Postcard Notice or the link to\n\nthe Notice and Claim Form to their beneficial owners shall also send a statement to the Claims\n\nAdministrator confirming that the mailing and/or emailing was made as directed. Upon full\n\n\n\n\n 7\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 8 of 17\n\n\n\n\ncompliance with these directions, nominees may seek reimbursement of their reasonable expenses\n\nactually incurred in providing notice to beneficial owners up to a maximum of $0.02 per name,\n\naddress, and email address provided to the Claims Administrator, up to $0.02 per Postcard Notice\n\nactually mailed plus postage at the pre-sort rate used by the Claims Administrator, or up to $0.02\n\nper link to the electronic Notice and Claim Form transmitted by email, by providing the Claims\n\nAdministrator with proper documentation supporting the expenses for which reimbursement is\n\nsought. Such properly documented expenses incurred by nominees in compliance with the terms\n\nof this Order shall be paid from the Settlement Fund, with any disputes as to the reasonableness or\n\ndocumentation of expenses incurred subject to review by the Court. Nominees are not authorized\n\nto print the Postcard Notice. Postcard Notices may only be printed by the Claims Administrator.\n\n 16. Lead Counsel shall, at least seven (7) calendar days before the Settlement Hearing,\n\nfile with the Court proof, by affidavit or declaration, of mailing of the Postcard Notice and/or\n\nemailing the links to the Notice and Claim Form.\n\n 17. Lead Counsel shall cause the Summary Notice to be published in PR Newswire\n\nwithin fourteen (14) calendar days of the Notice Date. Lead Counsel shall, at or before the\n\nSettlement Hearing, file with the Court proof of publication of the Summary Notice.\n\n 18. In order to be eligible to receive a distribution from the Net Settlement Fund, in the\n\nevent the Settlement is effected in accordance with the terms and conditions set forth in the\n\nStipulation, each Claimant shall take the following actions and be subject to the following\n\nconditions:\n\n (a) A properly executed Claim Form, substantially in the form annexed hereto\n\nas Exhibit 2, must be submitted to the Claims Administrator, at the address indicated in the Notice,\n\npostmarked no later than 120 days after the Notice Date. Such deadline may be further extended\n\n\n\n\n 8\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 9 of 17\n\n\n\n\nby Court order or by Lead Counsel in its discretion. Each Claim Form shall be deemed to have\n\nbeen submitted when postmarked (if properly addressed and mailed by first-class or overnight\n\nmail, postage prepaid). Any Claim Form submitted in any other manner shall be deemed to have\n\nbeen submitted when it was actually received at the address designated in the Notice. Any\n\nSettlement Class Member who does not timely submit a Claim Form within the time provided for\n\nshall be barred from sharing in the distribution of the Net Settlement Fund, unless otherwise\n\nordered by the Court, but shall remain bound by all determinations and judgments in this Action\n\nconcerning the Settlement, as provided by Paragraph 21 of this order.\n\n (b) The Claim Form submitted by each Claimant must satisfy the following\n\nconditions, unless otherwise allowed pursuant to the Stipulation: (i) it must be properly completed,\n\nsigned, and submitted in a timely manner in accordance with the provisions of the preceding\n\nsubparagraph; (ii) it must be accompanied by adequate supporting documentation for the\n\ntransactions reported therein, in the form of broker confirmation slips, broker account statements,\n\nan authorized statement from the broker containing the transactional information found in a broker\n\nconfirmation slip, or such other documentation as is deemed adequate by the Claims Administrator\n\nand/or Lead Counsel; (iii) if the Person executing the Claim Form is acting in a representative\n\ncapacity, a certification of her current authority to act on behalf of the Claimant must be included\n\nin the Claim Form; and (iv) the Claim Form must be complete and contain no material deletions\n\nor modifications of any of the printed matter contained therein and must be signed under penalty\n\nof perjury. Claimants bear the burden of establishing their right to a recovery from the Net\n\nSettlement Fund.\n\n (c) Once the Claims Administrator has considered a timely submitted Claim\n\nForm, it shall determine whether such Claim is valid, deficient, or rejected. For each Claim\n\n\n\n\n 9\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 10 of 17\n\n\n\n\ndetermined to be either deficient or rejected, the Claims Administrator shall send a deficiency letter\n\nor rejection letter as appropriate, describing the basis on which the Claim was so determined. Any\n\nPerson who timely submits a Claim Form that is deficient shall be afforded a reasonable time (at\n\nleast ten (10) calendar days) to cure such deficiency if it appears that such deficiency may be cured.\n\nIf any Claimant whose Claim has been rejected in whole or in part (either due to uncurable\n\ndeficiency, a failure to cure a deficiency, or any other stated basis) wishes to contest such rejection,\n\nthe Claimant must, within ten (10) calendar days after the date of mailing of the rejection or partial\n\nrejection notice, serve upon the Claims Administrator a notice and statement of reasons indicating\n\n\n\nrequesting a review thereof by the Court. If an issue concerning a Claim cannot be otherwise\n\nresolved, Lead Counsel shall thereafter present the request for review to the Court.\n\n (d) As part of the Claim Form, each Claimant shall submit to the jurisdiction of\n\nthe Court with respect to the Claim submitted, and shall, upon the Effective Date, release all claims\n\nas provided in the Stipulation.\n\n 19. All Settlement Class Members who do not submit valid and timely Claim Forms\n\nwill be forever barred from receiving any payments from the Net Settlement Fund, except as\n\notherwise ordered by the Court or allowed by Lead Counsel in their discretion, but will in all other\n\nrespects be subject to and bound by the provisions of the Stipulation and Judgment, if entered,\n\nunless they validly exclude themselves from the Settlement Class.\n\n 20. Any Settlement Class Member may enter an appearance in this Action, at his, her,\n\nor its own expense, individually or through counsel of his, her, or its own choice. If any Settlement\n\nClass Member does not enter an appearance, he, she, or it will be represented by Lead Counsel.\n\n\n\n\n 10\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 11 of 17\n\n\n\n\n 21. Settlement Class Members shall be bound by all orders, determinations, and\n\njudgments in this Action, whether favorable or unfavorable, unless such Persons request exclusion\n\nfrom the Settlement Class in a timely and proper manner, as hereinafter provided. A putative\n\nSettlement Class Member wishing to make such an exclusion request shall mail the request in\n\nwritten form by first-class mail to the address designated in the Notice for such exclusions, such\n\nthat it is received no later than twenty-one (21) calendar days prior to the Settlement Hearing. Such\n\nrequest for exclusion must clearly: (a) indicate the name, address, telephone number, and e-mail\n\ncontact information (if any) of the Person seeking exclusion, (b) state that the sender requests to\n\n In re Hut 8 Corp. Securities Litigation, Case No. 1:24-\n\ncv-00904-VM (S.D.N.Y.), and (c) state the number of shares of Hut 8 common stock the Person\n\nseeking exclusion (i) owned as of the opening of trading on February 13, 2023, (ii) received in\n\n\n\n\nsecurities in connection with the Merger, (iii) purchased, acquired, and/or sold during the\n\nSettlement Class Period, including the number of shares and prices for each transaction, and (iv)\n\nheld as of the close of trading on January 14, 2024. To be valid, such request for exclusion must\n\nbe submitted with documentary proof (i) of each purchase, acquisition, and, if applicable, sale of\n\nHut 8 common stock during the Settlement Class Period, and (ii)\n\nstatus as a beneficial owner of the Hut 8 common stock. Any such request for exclusion must be\n\nsigned and submitted by the beneficial owner under penalty of perjury. The request for exclusion\n\nshall not be effective unless it provides the required information, is legible, and is made within the\n\ntime stated above, or the exclusion is otherwise accepted by the Court. Lead Counsel may contact\n\n\n\n\n 11\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 12 of 17\n\n\n\n\nany Person filing a request for exclusion, or their attorney if one is designated, to discuss the\n\nexclusion.\n\n 22. The Claims Administrator shall provide all requests for exclusion and supporting\n\ndocumentation submitted therewith (including untimely requests and revocations of requests) to\n\nLead Counsel as soon as possible and no later than the deadline for requesting exclusion or upon\n\nthe receipt thereof (if later than the deadline for requesting exclusion). Lead Counsel shall\n\npromptly (and in any event no later than five (5) calendar days after receiving a request for\n\nexclusion or twenty-one (21) calendar days prior to the Settlement Hearing, whichever is earlier)\n\nprovide\n\nrevocations of requests for exclusion, by email.\n\n 23. All Persons who submit a valid, timely, and unrevoked request for exclusion shall\n\nhave no rights under the Stipulation, shall not share in the distribution of the Net Settlement Fund,\n\nand shall not be bound by the Stipulation or any Final Judgment. Unless otherwise ordered by the\n\nCourt, any Class Member who does not submit a valid and timely written Request for Exclusion\n\nas provided by this paragraph shall be bound by the Stipulation.\n\n 24. Any Settlement Class Member who does not request exclusion from the Settlement\n\nClass may object to the proposed Settlement, the proposed Plan of Allocation, or the Fee and\n\nExpense Application. Any objections must be signed by the objector and clearly and legibly\n\n(a) state the name, address, telephone number, and e-mail address (if any) of the objector; (b) state\n\nthat the objector is objecting to the proposed Settlement, Plan of Allocation, or Fee and Expense\n\nApplication In re Hut 8 Corp. Securities Litigation, Case No. 1:24-cv-00904-VM\n\n(c) state the objection(s) and the specific reasons for each objection, including whether it applies\n\nonly to the objector, to a specific subset of the Settlement Class, or to the entire Settlement Class,\n\n\n\n\n 12\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 13 of 17\n\n\n\n\nand any legal and evidentiary support, and witnesses the Settlement Class Member wishes to bring\n\n\n\nin the Settlement Class, including the number of shares of Hut 8 common stock that the objector\n\npurchased, acquired, or sold during the Settlement Class Period, as well as the date(s) and price(s)\n\nof each such purchase, acquisition, or sale. Objectors who are represented by counsel must also\n\nprovide the name, address, and telephone number of all counsel, if any, who represent them,\n\nincluding their former or current counsel who may be entitled to compensation in connection with\n\nthe objection; the number of times the objector and their counsel have filed an objection to a class\n\naction settlement in the last five years; the nature of each such objection in each case; and the name\n\nand docket number of each case.\n\n 25.\n\nSettlement, the Plan of Allocation, or the Fee and Expense Application only if such Settlement\n\nClass Member has served on the following counsel, by hand or by mail, his, her, or its written\n\nobjection and supporting papers, such that they are received on or before twenty-one (21) calendar\n\ndays before the Settlement Hearing:\n\nLead Counsel:\nJeremy A. Lieberman\nMurielle J. Steven Walsh\nPOMERANTZ LLP\n600 Third Avenue, 20th Floor\nNew York, NY 10016\n\nCounsel for Defendants:\nLissa M. Percopo\nGIBSON, DUNN & CRUTCHER LLP\n1700 M Street N.W.\nWashington, D.C. 20036-4504\n\nand has filed, either by mail or in person, at least twenty-one (21) calendar days prior to the\n\nSettlement Hearing, said objections and supporting papers with the Clerk of the Court, United\n\n\n\n 13\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 14 of 17\n\n\n\n\nStates District Court for the Southern District of New York, Daniel Patrick Moynihan United\n\nStates Courthouse, 500 Pearl Street, New York, NY 10007.\n\n 26. Any Settlement Class Member who does not object in the manner prescribed above\n\nshall be deemed to have waived such objection and shall forever be foreclosed from making any\n\nobjection to any aspect of the Settlement, to the Plan of Allocation, or to the Fee and Expense\n\nApplication, unless otherwise ordered by the Court, and shall otherwise be bound by the Judgment\n\nto be entered and the releases to be given.\n\n 27. Settlement Class Members do not need to appear at the hearing or take any other\n\naction to indicate their approval. However, Persons wishing to be heard orally in opposition to the\n\napproval of the Settlement, the Plan of Allocation, and/or the Fee and Expense Application are\n\nrequired to indicate in their written objection their intention to appear at the hearing. Further,\n\nPersons who intend to object to the Settlement, the Plan of Allocation, and/or the Fee and Expense\n\nApplication and desire to present evidence at the Settlement Hearing must include in their written\n\nobjections the identity of any witnesses they may call to testify and exhibits they intend to\n\nintroduce into evidence at the Settlement Hearing.\n\n 28. Until otherwise ordered by the Court, the Court stays all proceedings in the Action,\n\nother than proceedings necessary to carry out or enforce the terms and conditions of the Settlement.\n\nPending final determination of whether the Settlement should be approved, Plaintiff, each and\n\nevery Settlement Class Member, and anyone who acts or purports to act on their behalf, shall not\n\ninstitute, commence, or prosecute any action or proceeding in any court or tribunal which asserts\n\n he Released Defendant Parties.\n\n 29. Fee\n\nand Expense Application shall be filed with the Court and served on or before thirty-five (35)\n\n\n\n\n 14\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 15 of 17\n\n\n\n\ncalendar days prior to the date set herein for the Settlement Hearing. Any submissions filed in\n\nresponse to any objections or in further support of the Settlement, the Plan of Allocation, and/or\n\nthe Fee and Expense Application shall be filed no later than seven (7) calendar days prior to the\n\nSettlement Hearing.\n\n 30. No Person who is not a Settlement Class Member or Lead Counsel shall have any\n\nright to any portion of, or to any distribution of, the Net Settlement Fund unless otherwise ordered\n\nby the Court or otherwise provided in the Stipulation.\n\n 31. All funds held in escrow shall be deemed and considered to be in custodia legis of\n\nthe Court, and shall remain subject to the jurisdiction of the Court, until such time as such funds\n\nshall be disbursed pursuant to the Stipulation and/or further order of the Court.\n\n 32. Neither Defendants, their counsel, nor any of the Released Defendant Parties shall\n\n\n\nLitigation Expenses submitted by Lead Counsel or Plaintiff, and such matters will be considered\n\nseparately from the fairness, reasonableness, and adequacy of the Settlement. Any order or\n\n Litigation\n\nExpenses, or any appeal from any order relating thereto or reversal or modification thereof, shall\n\nnot operate to terminate or cancel the Stipulation, or affect or delay the finality of the Judgment\n\napproving the Stipulation and the settlement of the Action.\n\n 33. If the Settlement is terminated as provided in the Stipulation, the Settlement is not\n\napproved or consummated for any reason whatsoever, or the Effective Date of the Settlement\n\notherwise fails to occur, then both the Stipulation (as well as any amendments thereto), except as\n\notherwise provided therein, this Preliminary Approval Order, and all proceedings had in\n\nconnection therewith shall be null and void, of no further force or effect, and without prejudice to\n\n\n\n\n 15\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 16 of 17\n\n\n\n\nany Party, and may not be introduced as evidence or used in any actions or proceedings by any\n\nPerson or entity against the Parties for any purpose. In any such event, the Parties shall not forfeit\n\nor waive any factual or legal defense or contention in the Action and the Parties shall be deemed\n\nto have reverted to their respective litigation positions in the Action as of May 27, 2026.\n\n 34. This Order, the term sheet entered into by and between the Parties on May 27, 2026,\n\nthe Stipulation (whether or not finally approved or consummated), in addition to the negotiations\n\nof these items and any proceedings taken pursuant to them, do not constitute and shall not be:\n\n (a) offered against or received against or to the prejudice of any of the Released\n\nDefendant Parties as evidence of, or construed as, or deemed to be evidence of any presumption,\n\nconcession, or admission by any of the Released Defendant Parties with respect to the truth of any\n\nallegation by Plaintiff or the Settlement Class, or the validity of any claim that has been or could\n\nhave been asserted in the Action or in any litigation, including, but not limited to, the Released\n\n or of any liability, damages, negligence, fault, or wrongdoing of any of the\n\nReleased Defendant Parties or any Person or entity whatsoever, or of any infirmity in any of\n\n ;\n\n (b) offered or received against or to the prejudice of any of the Released\n\nDefendants Parties as evidence of a presumption, concession, or admission of any fault,\n\nmisrepresentation, or omission with respect to any statement or written document approved or\n\nmade by any of the Released Defendants Parties, or against or to the prejudice of Plaintiff, or any\n\nSettlement Class Member as evidence of any infirmity in the claims of Plaintiff or the Settlement\n\nClass Members;\n\n (c) offered or received against or to the prejudice of any of the Released\n\nDefendant Parties, Plaintiff, any Settlement Class Member, or their respective counsel, as evidence\n\n\n\n\n 16\n\f Case 1:24-cv-01636-VM Document 10 Filed 07/08/26 Page 17 of 17\n\n\n\n\nof a presumption, concession, or admission with respect to any liability, damages, negligence,\n\nfault, infirmity, or wrongdoing, or in any way referred to for any other reason against or to the\n\nprejudice of any of the Released Defendant Parties, Plaintiff, Settlement Class Members, or their\n\nrespective counsel, in any other civil, criminal, or administrative action or proceeding, other than\n\nsuch proceedings as may be necessary to effectuate the provisions of this Stipulation;\n\n (d) construed against any of the Released Defendant Parties, Plaintiff, or any\n\nSettlement Class Member, as an admission or concession that the consideration to be given\n\nhereunder represents the amount that could be or would have been recovered after trial; and\n\n (e) construed as or received in evidence as an admission, concession, or\n\npresumption against Plaintiff or any Settlement Class Member that any of their claims are without\n\nmerit or infirm or that damages recoverable in the Action would not have exceeded the Settlement\n\nAmount.\n\n 35. The entered during this Action relating to the confidentiality of\n\ninformation shall survive this Settlement.\n\n 36. The Court retains exclusive jurisdiction over the Action to consider all further\n\nmatters arising out of or connected with the Settlement.\n\n\n\nDATED this 8th day of July, 2026.\nNew York, New York\n\n ____________________________________\n HONORABLE VICTOR MARRERO\n UNITED STATES DISTRICT JUDGE\n\n\n\n\n 17\n\f","ocr_status":2,"date_upload":"2026-08-06T09:28:08.942064-07:00","document_number":"10","attachment_number":null,"pacer_doc_id":"127039937901","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion for Settlement","acms_document_guid":""}],"date_created":"2026-07-08T15:11:34.303980-07:00","date_modified":"2026-07-08T15:11:34.311624-07:00","date_filed":"2026-07-08","time_filed":"17:08:01","entry_number":10,"recap_sequence_number":"2026-07-08.001","pacer_sequence_number":50,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/437658092/","id":437658092,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68307680/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/452135957/","id":452135957,"tags":[],"absolute_url":"/docket/68307680/9/latino-v-hut-8-corp/","date_created":"2025-09-12T10:09:11.849848-07:00","date_modified":"2025-11-19T03:29:10.173635-08:00","sha1":"987d78876367f14336118316cf04ee5a5fab1ead","page_count":78,"file_size":396185,"filepath_local":"recap/gov.uscourts.nysd.616802/gov.uscourts.nysd.616802.9.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.616802/gov.uscourts.nysd.616802.9.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 1 of 78\n\n\n\n 9/12/24\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n\nIN RE HUT 8 CORP. SECURITIES\nLITIGATION\n\n 24 Civ. 904 (VM)\nTHIS DOCUMENT RELATES TO ALL ACTIONS\n DECISION AND ORDER\n\n\nVICTOR MARRERO, United States District Judge.\n\n Lead plaintiff Abhishek Maheshwari (\u201cMaheshwari\u201d or\n\n\u201cLead Plaintiff\u201d), individually and on behalf of all others\n\nsimilarly situated, brings this action against defendants Hut\n\n8 Corp. (\u201cHut 8\u201d or the \u201cCompany\u201d), and Asher Genoot\n\n(\u201cGenoot\u201d), Michael Ho (\u201cHo\u201d), Jaime Leverton (\u201cLeverton\u201d),\n\nand Shenif Visram (\u201cVisram\u201d, and collectively, the\n\n\u201cIndividual Defendants\u201d, and together with Hut 8, the\n\n\u201cDefendants\u201d). Lead Plaintiff alleges violations of the\n\nsecurities laws. (See \u201cConsolidated Amended Complaint\u201d or\n\n\u201cCAC\u201d, Dkt. No. 39.) Maheshwari claims that Defendants made\n\nmaterially false and misleading statements in connection with\n\nthe November 2023 merger (the \u201cMerger\u201d) of two data mining\n\ncompanies, which formed Hut 8. Before the Court is Defendants\u2019\n\nmotion to dismiss the Consolidated Amended Complaint,\n\n(\u201cMotion to Dismiss\u201d or \u201cMTD\u201d, Dkt. No. 52), pursuant to\n\nFederal Rule of Civil Procedure (\u201cRule\u201d) 12(b)(6). For the\n\n\n\n\n 1\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 2 of 78\n\n\n\nreasons below, the Motion to Dismiss is GRANTED in part and\n\nDENIED in part.\n\n I. BACKGROUND 1 0F\n\n\n\n\n Lead Plaintiff brings this securities class action on\n\nbehalf of all persons and entities that purchased or otherwise\n\nacquired Hut 8 securities (the \u201cSecurities\u201d) between February\n\n13, 2023, and January 18, 2024, inclusive (the \u201cClass\n\nPeriod\u201d). (See CAC \u00b6\u00b6 1, 9, 53.) Lead Plaintiff alleges that\n\nDefendants made materially false and/or misleading statements\n\nin filings with the United States Securities and Exchange\n\nCommission (the \u201cSEC\u201d) surrounding the Merger of Hut 8 Mining\n\nCorp. (\u201cLegacy Hut\u201d) and U.S. Data Mining Group, Inc. d/b/a\n\nUS Bitcoin Corp. (\u201cUSBTC\u201d), which formed Hut 8. (See id. \u00b6\u00b6 3,\n\n6.)\n\n A. THE PARTIES\n\n Lead Plaintiff is an individual who purchased Hut 8\n\nsecurities during the Class Period. (See id. \u00b6 16.)\n\n Hut 8 is a large-scale energy infrastructure company and\n\none of North America\u2019s largest Bitcoin miners. (See id. \u00b6 2.)\n\nLegacy Hut was a Canada-based public company that mined\n\ndigital assets and provided high-performance computing\n\n\n1 Except as otherwise noted, the following background derives from the\n\nCAC. The Court takes all facts alleged therein as true and construes the\njustifiable inferences arising therefrom in the light most favorable to\nthe Lead Plaintiff, as required under the standard set forth in Section\nIII below.\n\n 2\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 3 of 78\n\n\n\ninfrastructure. (See id. \u00b6\u00b6 4, 36.) USBTC was a privately\n\nheld Nevada company with a principal place of business in\n\nMiami, Florida, and a builder and strategic operator of\n\nBitcoin mining sites. (See id. \u00b6\u00b6 5, 39.) At the time of the\n\nMerger, USBTC held a fifty percent interest in a digital asset\n\nmining site in King Mountain, Texas (the \u201cKing Mountain Joint\n\nVenture\u201d or \u201cKing Mountain JV\u201d). (See id. \u00b6\u00b6 42-43.)\n\n The Individual Defendants were officers of Hut 8 and\n\npreviously were former officers of USBTC or Legacy Hut. At\n\nall relevant times, Genoot was Hut 8\u2019s President, Ho was Hut\n\n8\u2019s Chief Strategy Officer, Leverton was Hut 8\u2019s Chief\n\nExecutive Officer (\u201cCEO\u201d), and Visram was Hut 8\u2019s Chief\n\nFinancial Officer (\u201cCFO\u201d). (See id. \u00b6\u00b6 18-21.) Prior to the\n\nMerger, Genoot was USBTC\u2019s President and a director, Ho was\n\nUSBTC\u2019s CEO and Chairman of the Board, Leverton was Legacy\n\nHut\u2019s CEO, and Visram was Legacy Hut\u2019s CFO. (See id.)\n\n B. THE MERGER\n\n On February 7, 2023, Legacy Hut and USBTC announced that\n\nthe companies would combine in an all-stock merger of equals\n\nand become wholly owned subsidiaries of Hut 8 pursuant to a\n\nbusiness combination agreement (the \u201cBusiness Combination\n\nAgreement\u201d). (See id. \u00b6 48.) On February 13, 2023 \u2013 the date\n\nthe Class Period begins - Hut 8 filed the initial\n\nregistration statement on Form S-4 (the \u201cInitial Registration\n\n 3\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 4 of 78\n\n\n\nStatement\u201d) with the SEC, announcing the proposed Merger. 2 1F\n\n\n\n\n(See id. \u00b6 53.) Ho and Leverton submitted their written\n\nconsent to being named in the Initial Registration Statement\n\nas prospective directors. (See id. \u00b6 54.) Hut 8 filed seven\n\namendments to the Initial Registration Statement on Forms S-\n\n4/A on April 18 (\u201cFirst Amendment\u201d or \u201c1st Amend.\u201d), June 12\n\n(\u201cSecond Amendment\u201d or \u201c2d Amend.\u201d), July 17 (\u201cThird\n\nAmendment\u201d or \u201c3d Amend.\u201d), August 24 (\u201cFourth Amendment\u201d or\n\n\u201c4th Amend.\u201d), September 18 (\u201cFifth Amendment\u201d or \u201c5th\n\nAmend.\u201d), November 6 (\u201cSixth Amendment\u201d or \u201c6th Amend.\u201d), and\n\nNovember 7, 2023 (\u201cSeventh Amendment\u201d or \u201c7th Amend.\u201d). 3 (See 2F\n\n\n\n\nid. \u00b6 55.) Genoot and Ho signed each Amendment, which\n\nincorporated Ho\u2019s and Leverton\u2019s consent to be named as\n\nprospective directors. (See id. \u00b6 55.) On November 9, 2023,\n\n\n\n\n2 See Hut 8 Corp., Registration Statement (Form S-4) (Feb. 13, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923019807/tm23\n5928-1_s4.htm.\n\n3 See Hut 8 Corp., Amendment No. 1 (Form S-4) (Apr. 17, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923046342/tm23\n5928-4_s4.htm; Hut 8 Corp., Amendment No. 2 (Form S-4) (June 12, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923070494/tm23\n5928-8_s4a.htm; Hut 8 Corp., Amendment No. 3 (Form S-4) (July 14, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923081328/tm23\n5928-13_s4a.htm; Hut 8 Corp., Amendment No. 4 (Form S-4) (Aug. 24, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923094950/tm23\n5928-21_s4a.htm; Hut 8 Corp., Amendment No. 5 (Form S-4) (Sept. 18, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923101668/tm23\n5928-27_s4a.htm; Hut 8 Corp., Amendment No. 6 (Form S-4) (Nov. 6, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923114442/tm23\n5928-30_s4a.htm; Hut 8 Corp., Amendment No. 7 (Form S-4) (Nov. 7, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923115414/tm23\n5928-38_s4a.htm.\n\n\n 4\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 5 of 78\n\n\n\nthe SEC declared the amended Registration Statement (the\n\n\u201cAmended Registration Statement\u201d) effective. (See id. \u00b6 56.)\n\nThat day, Hut 8 filed the final prospectus on Form 424(b)(3)\n\n(the \u201cProspectus\u201d, and with the Initial Registration\n\nStatement and Amendments, the \u201cRegistration Statement\u201d),\n\nincorporating the Amended Registration Statement. 4 (See id. 3F\n\n\n\n\n\u00b6 57.) On November 29, 2023, Hut 8 filed three registration\n\nstatements on Form S-8 (the \u201cForms S-8\u201d), which registered\n\nshares related to employee benefit plans. 5 (See id. \u00b6 58.)\n 4F\n\n\n\n\nGenoot and Ho signed each of the Forms S-8, which incorporated\n\nthe Prospectus by reference. (See id. \u00b6 58.)\n\n On November 30, 2023, the Merger closed. (See id. \u00b6 59.)\n\nOn December 19, 2023, Hut 8 filed a 10-Q Form (the \u201cDecember\n\n2023 10-Q\u201d or \u201cDec. 2023 10-Q\u201d). 6 (See id. \u00b6 66.) On January\n 5F\n\n\n\n\n18, 2024 \u2013 the date the Class Period ends - J Capital\n\n\n4 See Hut 8 Corp., Prospectus (Form 424(b)(3)) (Nov. 9, 2023),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923116384/tm23\n5928-42_424b3.htm.\n\n5 See Hut 8 Corp., Registration Statement (Form S-8) (Nov. 29, 2023)\n(registering up to 6,065,682 shares of common stock),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923122084/tm23\n31643d1_s8.htm; Hut 8 Corp., Registration Statement (Form S-8) (Nov. 29,\n2023) (registering up to 4,490,400 shares of common stock),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923122086/tm23\n31643d2_s8.htm; Hut 8 Corp., Registration Statement (Form S-8) (Nov. 29,\n2023) (registering up to 1,553,254 shares of common stock),\nhttps://www.sec.gov/Archives/edgar/data/1964789/000110465923122087/tm23\n31643d3_s8.htm.\n\n6 See Hut 8 Corp., Quarterly Report (Form 10-K) (Dec. 19, 2023),\nhttps://www.sec.gov/ix?doc=/Archives/edgar/data/0001964789/000110465923\n127101/hut-20230930x10q.htm.\n\n\n 5\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 6 of 78\n\n\n\nResearch published a report (the \u201cShort Seller Report\u201d),\n\nalleging that Hut 8\u2019s stock was overvalued because USBTC would\n\nhave declared bankruptcy without the Merger and the King\n\nMountain JV had experienced persistent energy and internet\n\nproblems. 7 6F (See id. \u00b6\u00b6 9, 114, 116.) That day, upon\n\npublication of the Short Seller Report, Hut 8\u2019s stock price\n\nfell $2.16, or 23.3 percent, to close at $7.12 per share.\n\n(See id. \u00b6 10.) On January 24, 2024, Hut 8 issued a press\n\nrelease denying the Report\u2019s veracity. (See id. \u00b6\u00b6 82-84.)\n\n Lead Plaintiff alleges that Defendants made materially\n\nfalse and misleading statements and omissions during the\n\nClass Period in the above SEC filings, as detailed below.\n\n C. STATEMENTS REGARDING USBTC\u2019S FINANCIAL CONDITION\n\n First, Lead Plaintiff alleges that Defendants suggested\n\nthat USBTC was financially strong enough to sustain\n\noperations for another year when in fact the Merger saved\n\nUSBTC from bankruptcy. (See CAC \u00b6\u00b6 6, 70.) Lead Plaintiff\n\nalleges that the following statements in Hut 8\u2019s SEC filings\n\nwere false or misleading. First, the Initial Registration\n\nStatement and the First, Second, and Third Amendments stated\n\nthat USBTC \u201cbelieves its current cash on hand and subsequent\n\n\n\n7 See J Capital Research, \u201cThe Coming HUT Pump and Dump\u201d (Jan. 18, 2024),\nchrome-\nextension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.jcapitalresear\nch.com/uploads/2/0/0/3/20032477/2024_01_18_hut.pdf.\n\n 6\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 7 of 78\n\n\n\nequity and debt financings will be sufficient to meet its\n\noperating and capital requirements for at least the next\n\ntwelve months from the date these unaudited condensed\n\nconsolidated financial statements are issued\u201d (\u201cFinancial\n\nStatement No. 1\u201d or \u201cFin. Statement No. 1\u201d). (Id. \u00b6 61; see\n\nalso id. \u00b6 64.) Second, the Fourth, Fifth, Sixth, and Seventh\n\nAmendments, and the Prospectus stated that USBTC \u201cbelieves\n\nits current cash on hand, proceeds from the sales of\n\ncryptocurrency and ongoing operations will be sufficient to\n\nmeet its operating and capital requirements for at least the\n\nnext twelve months from the date these consolidated financial\n\nstatements are issued\u201d (\u201cFinancial Statement No. 2\u201d or \u201cFin.\n\nStatement No. 2\u201d). (Id. \u00b6 65.) Third, the December 2023 10-Q\n\nstated that USBTC \u201cbelieves its current cash on hand, proceeds\n\nfrom the sale of cryptocurrency, and ongoing operations will\n\nbe sufficient to meet its operating and capital requirements\n\nfor at least the next twelve months from the date these\n\nunaudited condensed consolidated financial statements are\n\nissued\u201d (\u201cFinancial Statement No. 3\u201d or \u201cFin. Statement\n\nNo. 3\u201d). (Id. \u00b6 66.) Fourth, the Registration Statement\n\nstated that \u201cUSBTC has incurred net losses since its inception\n\nbut does not anticipate it will continue to incur net losses\n\nfor the foreseeable future\u201d (\u201cFinancial Statement No. 4\u201d or\n\n\u201cFin. Statement No. 4\u201d). (Id. \u00b6 67.) Forms S-8 also contained\n\n 7\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 8 of 78\n\n\n\nFinancial Statements Nos. 2 and 4, insofar as Forms S-8\n\nincorporated the Prospectus. (See id. \u00b6 68.)\n\n Lead Plaintiff contends that USBTC\u2019s historical\n\nfinancial statements in the Registration Statement show that\n\nUSBTC could not have sustained operations for another year.\n\n(See id. \u00b6 70.) Per the Prospectus, USTBC had approximately\n\n$9 million available in net current assets as of June 30,\n\n2023. (See id. \u00b6 71.) Also, USBTC\u2019s cash flows showed an\n\naverage loss of $36.1 million the fiscal year ending June 30,\n\n2022 (\u201cFiscal 2022\u201d) and the fiscal year ending June 30, 2023\n\n(\u201cFiscal 2023\u201d). (See id. \u00b6 73.) Hence, Lead Plaintiff\n\nasserts, the $9 million available would have sustained\n\noperations for about four months, not twelve months. (See id.\n\n\u00b6\u00b6 73-74.)\n\n Moreover, Lead Plaintiff argues that to the extent the\n\nFinancial Statements were based on projections, those\n\nprojections were overly optimistic. (See id. \u00b6 75.) Per the\n\nProspectus, USBTC\u2019s cash flows used in operations for Fiscal\n\n2023 were approximately negative $29.3 million. As of January\n\n8, 2023, the Prospectus projected that USBTC would have\n\npositive cash flows of about $62.7 million in calendar year\n\n2023. (See id. \u00b6 76.) Given that Fiscal 2023 ended on June\n\n30, 2023, USBTC\u2019s cash flows from operations would have needed\n\nto \u201csignificantly improve\u201d in the remaining six months of\n\n 8\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 9 of 78\n\n\n\n2023 \u201cto even come close\u201d to the $62.7 million projection.\n\n(Id. \u00b6 77.) Likewise, the Seventh Amendment and the\n\nProspectus projected that, as of January 28, 2023, USBTC\u2019s\n\nearnings before interest, taxes, depreciation, and\n\namortization (\u201cEBITDA\u201d) and EBITDA margin for calendar year\n\n2023 would be at least 50 percent higher than what was\n\nachieved in Fiscal 2023. (See id. \u00b6 75.)\n\n Further, Lead Plaintiff contends that a confidential\n\nwitness (\u201cCW 1\u201d), a data analyst for Hut 8 in the months\n\nbefore the Merger and thereafter, asserts that Leverton told\n\nthe attendees of a Hut 8 retreat held from January 14-17,\n\n2024, that the Merger saved USBTC from bankruptcy. (See id.\n\n\u00b6\u00b6 81, 93.)\n\n Lead Plaintiff also asserts that Financial Statement\n\nNo. 4 failed to disclose required information under Item 303\n\nof SEC Regulation S-K (\u201cItem 303\u201d), which requires\n\nregistrants to describe any \u201cknown trends\u201d that are\n\n\u201creasonably likely to have a material favorable or\n\nunfavorable impact on net sales or revenues or income from\n\ncontinuing operations.\u201d 17 C.F.R. \u00a7 229.303(b)(2)(ii).\n\nAccordingly, although Financial Statement No. 4 disclosed\n\nthat \u201cUSBTC has incurred net losses since its inception,\u201d it\n\nmisleadingly stated that USBTC \u201cdoes not anticipate it will\n\n\n\n 9\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 10 of 78\n\n\n\ncontinue to incur net losses for the foreseeable future.\u201d\n\n(CAC \u00b6 102.)\n\n D. STATEMENTS REGARDING THE KING MOUNTAIN JV\n\n Second, Lead Plaintiff alleges that Defendants failed to\n\ndisclose the energy and internet issues that had already\n\nmaterialized at the King Mountain JV.\n\n Regarding the energy-related issues, CW 1 \u201chad daily\n\ndiscussions with the Director of Infrastructure before the\n\nMeger\u201d about the \u201congoing energy issues\u201d at the King Mountain\n\nJV. (Id. \u00b6 93.) Also, CW 1 \u201csaw evidence of the energy issues\n\nin the Hashrate failure and energy usage reports he received.\u201d\n\n(Id. \u00b6 96.) Per CW 1, the King Mountain JV had the most\n\ninefficient miners. (See id.) Accordingly, Lead Plaintiff\n\nalleges that the following statements in Hut 8\u2019s Registration\n\nStatement were materially misleading, as they did not\n\ndisclose the known energy problems. First, that \u201c[t]he USBTC\n\nteam will bring significant leadership in energy orientation,\n\ndevelopment, demand response, hedging, grid stabilization\n\nanalytics to [Hut 8], which will enhance [Hut 8\u2019s] ability to\n\nbetter plan around stable and predictable energy usage and\n\nmitigate fluctuating prices across markets\u201d (\u201cKing Mountain\n\nStatement No. 1\u201d). (Id. \u00b6 88.) Second, that:\n\n The Echo facility at King Mountain is co-located\n behind the meter at a wind farm, and at peak wind\n generation periods can draw up to 100% of the energy\n\n 10\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 11 of 78\n\n\n\n the wind project produces to power mining and\n hosting; the rest of the time, the energy is\n source[d] from [the Electrical Reliability Counsel\n of Texas (\u201cERCOT\u201d) grid] (\u201cKing Mountain Statement\n No. 2\u201d).\n\n(Id. \u00b6 89.)\n\n Third, that \u201c[t]he operation of the grids USBTC relies\n\non, including the . . . [ERCOT grid] . . . subjects USBTC to\n\na variety of risks, including the breakdown and failure of\n\nequipment . . . [and] outages affecting information\n\ntechnology systems\u201d (\u201cKing Mountain Statement No. 3\u201d). (Id.\n\n\u00b6 90.)\n\n Regarding the internet-related issues, according to CW\n\n1, there were often \u201cdips\u201d in the network service and several\n\noutages and network failures during his time with the Company,\n\nwhich were reported in daily outage reports. (See id. \u00b6\u00b6 97-\n\n98.) CW 1 claims that senior management directed data analysts\n\nto conceal the outages\u2019 true cause by characterizing the\n\nminers as overheated and not offline. Hence, at least half of\n\ninternet outages were falsely classified as overheating\n\nincidents. (See id. \u00b6 99.) Accordingly, Lead Plaintiff\n\nalleges that the following statement in Hut 8\u2019s Registration\n\nStatement was materially misleading, insofar as it did not\n\ndisclose the above known internet problems: \u201cUSBTC may face\n\nrisks of Internet disruptions, which could have an adverse\n\n\n\n 11\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 12 of 78\n\n\n\neffect on the price of Bitcoin\u201d (\u201cKing Mountain Statement\n\nNo. 4\u201d). (Id. \u00b6 92.)\n\n Also, Lead Plaintiff claims the Short Seller Report\n\ncorroborated CW 1\u2019s allegations with the following\n\ninformation. First, King Mountain JV\u2019s largest customer filed\n\na proof of claim on November 23, 2022, against the entity\n\nfrom whom USBTC acquired its fifty percent interest in the\n\nsite, alleging that the former co-owner failed to energize\n\nthousands of miners and provide an \u201cadequate high-speed\n\nnetwork.\u201d (Id. \u00b6\u00b6 117-18.) Second, that customer stated in\n\nits 2023 Annual Report that it experienced significant\n\nproduction downtime because of \u201cdelays in energization at\n\nKing Mountain.\u201d (Id. \u00b6 119.) Second, the Short Seller Report\n\nalleges that the King Mountain JV uses a \u201cStarlink satellite\n\nnetwork\u201d for internet access, which is \u201cunheard of in the\n\nBitcoin mining industry\u201d because Starlink is an unreliable\n\nchoice for mining at scale. (Id. \u00b6 120.)\n\n Additionally, Lead Plaintiff contends that King Mountain\n\nStatement No. 4 failed to disclose required information under\n\nItem 105 of Regulation S-K (\u201cItem 105\u201d), which requires that\n\nunder the \u201cRisk Factors\u201d section, the registrant include \u201ca\n\ndiscussion of the material factors that make an investment in\n\nthe registrant or offering speculative or risky\u201d and\n\n\u201cadequately describe[] the risk.\u201d 17 C.R.F. \u00a7 229.105(a).\n\n 12\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 13 of 78\n\n\n\nThus, King Mountain Statement No. 4\u2019s warning that \u201cUSBTC may\n\nface risks of Internet disruptions\u201d was inadequate, insofar\n\nas the disclosure suggested internet disruptions were a\n\npotential risk, rather than a risk that had already\n\nmaterialized. (CAC \u00b6\u00b6 108-09.)\n\n II. PROCEDURAL HISTORY\n\n On February 7, 2024 \u2013 approximately three weeks after\n\nthe Short Seller Report was published - plaintiff Ryan Mayiras\n\ninitiated this class action against Hut 8, Leverton, and\n\nVisram. (See \u201cMayiras Complaint\u201d, Dkt. No. 1.) On March 4,\n\n2024, plaintiff Mark Latino initiated a parallel class action\n\nagainst the same defendants. (See \u201cLatino Complaint\u201d, Case\n\nNo. 24 Civ. 01636, Dkt. No. 1.) On March 15, 2024, this Court\n\nconsolidated the two actions pursuant to Rule 42 because the\n\nComplaints described the same or substantially similar\n\nunderlying events arising out of the same or substantially\n\nsimilar operative facts and asserted the same or\n\nsubstantially similar claims against the same defendants.\n\n(See \u201cConsolidation Order\u201d, Dkt. No. 9.)\n\n On April 19, 2024, the Court appointed Maheshwari as\n\nLead Plaintiff pursuant to Section 21D(a)(3)(B)(iii) of the\n\nPrivate Securities Litigation Reform Act of 1995 (the\n\n\u201cPSLRA\u201d), 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(I), finding that\n\nMaheshwari had the largest financial interest in the outcome\n\n 13\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 14 of 78\n\n\n\nof the action and satisfied the requirements of Rule 23. (See\n\n\u201cLead Plaintiff Order\u201d, Dkt. No. 34.)\n\n On June 14, 2024, Lead Plaintiff filed the CAC, naming\n\nHut 8, Ho, Genoot, Leverton, and Visram as Defendants. (See\n\nCAC.) Lead Plaintiff alleged violation of Section 11 of the\n\nSecurities Act (\u201cSection 11\u201d), 15 U.S.C. \u00a7 77k, as to Hut 8,\n\nHo, Genoot, and Leverton (\u201cCount I\u201d); violation of Section 15\n\nof the Securities Act (\u201cSection 15\u201d), 15 U.S.C. \u00a7 77o, as to\n\nthe Individual Defendants (\u201cCount II\u201d); violation of Section\n\n10(b) of the Exchange Act (\u201cSection 10(b)\u201d), 15 U.S.C. \u00a7 78j,\n\nand Rule 10b-5 promulgated thereunder, 17 C.F.R \u00a7 240.10b-5,\n\nas to all Defendants (\u201cCount III\u201d); and violation of Section\n\n20(a) of the Exchange Act (\u201cSection 20(a)\u201d), 15 U.S.C. \u00a7 78t,\n\nas to the Individual Defendants (\u201cCount IV\u201d). (See CAC \u00b6\u00b6 154-\n\n90.)\n\n After completion of the pre-motion letter exchange\n\noutlined in this Court\u2019s Individual Practice II.B, Defendants\n\nfiled their Motion to Dismiss on December 2, 2024 (see MTD),\n\nsupported by a memorandum of law (\u201cMemorandum\u201d or \u201cMem.\u201d,\n\nDkt. No. 53) and a declaration of Mary Beth Maloney (\u201cMaloney\n\nDeclaration\u201d or \u201cMaloney Decl.\u201d, Dkt. No. 54). On January 16,\n\n2025, Plaintiffs filed a memorandum of law in opposition to\n\nthe Motion to Dismiss (\u201cOpposition\u201d or \u201cOpp\u2019n.\u201d, Dkt.\n\n\n\n 14\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 15 of 78\n\n\n\nNo. 55). On February 18, 2025, Defendants filed a reply\n\nmemorandum of law (\u201cReply\u201d, Dkt. No. 56).\n\n III. LEGAL STANDARDS\n\n A. RULE 12(b)(6)\n\n \u201cTo survive a motion to dismiss [under Rule 12(b)(6)],\n\na complaint must contain sufficient factual matter, accepted\n\nas true, to \u2018state a claim to relief that is plausible on its\n\nface.\u2019\u201d Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting\n\nBell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim\n\nis plausible if the complaint states \u201cenough fact to raise a\n\nreasonable expectation that discovery will reveal evidence of\n\nillegal conduct\u201d \u2014 there is not \u201ca probability requirement at\n\nthe pleading stage.\u201d Lynch v. City of New York, 952 F.3d 67,\n\n75 (2d Cir. 2020) (quoting Twombly, 550 U.S. at 556(quotations\n\nomitted)); see Iqbal, 556 U.S. at 678 (\u201cA claim has facial\n\nplausibility when the plaintiff pleads factual content that\n\nallows the court to draw the reasonable inference that the\n\ndefendant is liable for the misconduct alleged.\u201d). \u201cIn other\n\nwords, a complaint should not be dismissed when the factual\n\nallegations sufficiently \u2018raise a right to relief above the\n\nspeculative level.\u2019\u201d Liboy v. Russ, No. 22 Civ. 10334, 2023\n\nWL 6386889, at *4 (S.D.N.Y. Sept. 29, 2023) (quoting Twombly,\n\n550 U.S. at 555). In reviewing a motion to dismiss under Rule\n\n12(b)(6), the Court must \u201cconstru[e] the complaint liberally,\n\n 15\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 16 of 78\n\n\n\naccepting all factual allegations in the complaint as true,\n\nand drawing all reasonable inferences in the plaintiff\u2019s\n\nfavor.\u201d Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008)\n\n(internal quotation marks omitted).\n\n When presented with a motion to dismiss pursuant to Rule\n\n12(b)(6), the Court may consider documents that are\n\nreferenced in the complaint, documents on which the\n\nplaintiffs relied in bringing suit and that are either in the\n\nplaintiffs' possession or about which the plaintiffs knew, or\n\nmatters of which judicial notice may be taken. See Chambers\n\nv. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002). When\n\nadjudicating a motion to dismiss a securities action based on\n\nalleged misrepresentations, the Court may also take judicial\n\nnotice of the contents of \u201cpublic disclosure documents\n\nrequired to be filed with the SEC,\u201d as well \u201crelated documents\n\nthat bear on the adequacy of the disclosure.\u201d Kramer v. Time\n\nWarner, Inc., 937 F.2d 767, 774 (2d Cir. 1991).\n\n B. SECURITIES ACT\n\n Section 11 of the Securities Act (\u201cSection 11\u201d)\n\n\u201cimpose[s] liability on certain participants in a registered\n\nsecurities offering\u201d when the registration statements\n\n\u201ccontain material misstatements or omissions.\u201d In re Morgan\n\nStanley Info. Fund Sec. Litig., 592 F.3d 347, 358 (2d Cir.\n\n2010); see 15 U.S.C. \u00a7 77k. To state a claim under Section\n\n 16\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 17 of 78\n\n\n\n11, the plaintiff must allege that: (1) he purchased a\n\nregistered security, either directly from the issuer or in\n\nthe aftermarket following the offering; (2) the defendant\n\nparticipated in the offering in a manner sufficient to give\n\nrise to liability under Section 11; and (3) the registration\n\nstatement \u201ccontained an untrue statement of a material fact\n\nor omitted to state a material fact required to be stated\n\ntherein or necessary to make the statements therein not\n\nmisleading.\u201d In re Morgan Stanley, 592 F.3d at 359-60 (quoting\n\n15 U.S.C. \u00a7 77k(a) (internal quotation marks omitted)).\n\n Section 15 of the Securities Act (\u201cSection 15\u201d) creates\n\nliability for individuals or entities that \u201ccontrol[] any\n\nperson liable\u201d under Sections 11 or 12 of the Securities Act.\n\n15 U.S.C. \u00a7 77o(a). To state a claim under Section 15, the\n\nplaintiff must allege (1) \u201ca primary violation by a controlled\n\nperson\u201d and (2) \u201ccontrol by the defendant of the primary\n\nviolator.\u201d In re Refco, Inc. Sec. Litig., 503 F. Supp. 2d\n\n611, 637 (S.D.N.Y. 2007). If the plaintiff has not adequately\n\nalleged a primary violation \u2013 i.e. a viable claim under\n\nanother provision of the Securities Act \u2013 the Section 15 claim\n\nmust be dismissed. (See id.)\n\n C. EXCHANGE ACT\n\n Section 10(b) of the Exchange Act (\u201cSection 10(b)\u201d)\n\nprovides that \u201cin connection with the purchase or sale of any\n\n 17\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 18 of 78\n\n\n\nsecurity,\u201d it is unlawful to use \u201cany manipulative or\n\ndeceptive device or contrivance in contravention of\u201d SEC\n\nrules and regulations. 15 U.S.C. \u00a7 78j(b). Rule 10b-5, in\n\nturn, prohibits making \u201cany untrue statement of a material\n\nfact\u201d or omitting \u201ca material fact necessary in order to make\n\nthe statements made . . . not misleading.\u201d 17 C.F.R.\n\n\u00a7 240.10b-5(b). To state a private securities-fraud claim\n\nunder Section 10(b) and Rule 10b-5, the plaintiff must plead\n\n\u201c(1) a material misrepresentation or omission by the\n\ndefendant; (2) scienter; (3) a connection between the\n\nmisrepresentation or omission and the purchase or sale of a\n\nsecurity; (4) reliance upon the misrepresentation or\n\nomission; (5) economic loss; and (6) loss causation.\u201d In Re\n\nPhilip Morris Int\u2019l Inc. Sec. Litig., 89 F.4th 408, 417 (2d\n\nCir. 2023) (quoting Stoneridge Inv. Partners, LLC v. Sci.-\n\nAtlanta, Inc., 552 U.S. 148, 157 (2008) (internal quotation\n\nmarks omitted)).\n\n Section 20(a) of the Exchange Act imposes liability on\n\nany \u201cperson who . . . controls any person liable\u201d under\n\nSection 10(b). 15 U.S.C. \u00a7 78t(a). To state a claim under\n\nSection 20(a), the plaintiff must show \u201c(1) a primary\n\nviolation by the controlled person, (2) control of the primary\n\nviolator by the defendant, and (3) that the defendant was, in\n\nsome meaningful sense, a culpable participant in the\n\n 18\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 19 of 78\n\n\n\ncontrolled person\u2019s fraud.\u201d Carpenters Pension Tr. Fund of\n\nSt. Louis v. Barclays PLC, 750 F.3d 227, 236 (2d Cir. 2014)\n\n(internal quotation marks omitted). As with Section 15 claims\n\nunder the Securities Act, if the plaintiff has not adequately\n\nalleged a primary violation under another provision of the\n\nExchange Act, the Section 20(a) claim must be dismissed. See\n\nid.\n\n Further, Exchange Act plaintiffs must satisfy the\n\nheightened pleading requirements of Rule 9(b) by \u201cstat[ing]\n\nwith particularity the circumstances constituting fraud.\u201d\n\nFed. R. Civ. P. 9(b). \u201cIn short, a plaintiff must set forth\n\nthe who, what, when, where and how of the alleged fraud.\u201d\n\nTelenor E. Inv. AS v. Altimo Holdings & Invs. Ltd., 567 F.\n\nSupp. 2d 432, 441\u201342 (S.D.N.Y. 2008) (internal quotation\n\nmarks omitted). \u201cAllegations that are conclusory or\n\nunsupported by factual assertions are insufficient.\u201d ATSI\n\nCommc\u2019ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 99 (2d Cir.\n\n2007).\n\n The PSLRA additionally imposes heightened pleading\n\nstandards for plaintiffs alleging securities fraud under the\n\nExchange Act, instructing that \u201cthe complaint shall specify\n\neach statement alleged to have been misleading, the reason or\n\nreasons why the statement is misleading, and, if an allegation\n\nregarding the statement or omission is made on information\n\n 19\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 20 of 78\n\n\n\nand belief, the complaint shall state with particularity all\n\nfacts on which that belief is formed.\u201d 15 U.S.C. \u00a7 78u-\n\n4(b)(1). Plaintiffs \u201cmust do more than say that the\n\nstatements . . . were false and misleading; they must\n\ndemonstrate with specificity why and how that is so.\u201d Rombach\n\nv. Chang, 355 F.3d 164, 174 (2d Cir. 2004). Further, the PSLRA\n\nrequires plaintiffs to \u201cstate with particularity facts giving\n\nrise to a strong inference that the defendant acted with the\n\nrequired state of mind\u201d (i.e. scienter). 15 U.S.C. \u00a7 78u-\n\n4(b)(2)(A); see also ATSI Commc\u2019ns, 493 F.3d at 99. A court\n\nshall grant a motion to dismiss a Section 10(b) claim if these\n\nrequirements are not met.\n\n IV. DISCUSSION\n\n Lead Plaintiff brings Counts I and II under Sections 11\n\nand 15 of the Securities Act, respectively (the \u201cSecurities\n\nAct Claims\u201d), and Counts III and IV under Section 10(b) and\n\n20(a) of the Exchange Act, respectively (the \u201cExchange Act\n\nClaims\u201d). (See CAC \u00b6\u00b6 154-90.) The CAC brings the Securities\n\nAct Claims as to Financial Statements Nos. 1-2 and 4, and\n\nKing Mountain Statements Nos. 1-4, as all are contained in\n\nthe Registration Statement. 8 (See CAC \u00b6\u00b6 156, 170.) See 15\n 7F\n\n\n\n\n8 Financial Statement No. 3, contained in the December 2023 10-K, is the\nonly alleged misstatement not contained in the Registration Statement and\nthus is inactionable under Sections 11 or 15 of the Securities Act. See\n15 U.S.C. \u00a7 77k.\n\n 20\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 21 of 78\n\n\n\nU.S.C. \u00a7\u00a7 77b(a)(8), 77f. The CAC brings the Exchange Act\n\nClaims as to Financial Statements Nos. 1-4 and King Mountain\n\nStatements Nos. 1-4. (See CAC \u00b6\u00b6 178, 188.)\n\n Defendants argue that (1) Lead Plaintiff does not have\n\nstatutory standing to bring a claim under Section 10(b) of\n\nthe Exchange Act; (2) Lead Plaintiff\u2019s Securities Act Claims\n\nare subject to Rule 9(b)\u2019s heightened pleading standard\n\nbecause those claims sound in fraud; and (3) Lead Plaintiff\n\nhas failed to state a claim under the Securities Act or the\n\nExchange Act because none of the challenged Statements are\n\nmaterially false or misleading. (See Mem. at 9, 29.)\n\n The Court addresses Section 10(b) standing first. Then,\n\nthe Court turns to whether Rule 8(a)\u2019s \u201cshort plain statement\u201d\n\nstandard or Rule 9(b)\u2019s \u201cparticularity\u201d standard applies to\n\nthe Securities Act Claims. Next, the Court evaluates whether\n\nLead Plaintiff alleged any material untrue statements or\n\nomissions before analyzing the remaining elements of the\n\nclaims.\n\n A. STANDING UNDER SECTION 10(b)\n\n To sue under Section 10(b) of the Exchange Act,\n\nplaintiffs must have \u201cat least dealt in the security to which\n\nthe prospectus, representation, or omission relates.\u201d Blue\n\nChip Stamps v. Manor Drug Stores, 421 U.S. 723, 747 (1975);\n\nsee also Birnbaum v. Newport Steel Corp., 193 F.2d 461, 463\n\n 21\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 22 of 78\n\n\n\n(2d Cir. 1952). \u201cUnder the purchaser-seller rule, standing to\n\nbring a claim under Section 10(b) is limited to purchasers or\n\nsellers of securities about which a misstatement was made.\u201d\n\nMenora Mivtachim Ins. Ltd. v. Frutarom Indus. Ltd., 54 F.4th\n\n82, 84 (2d Cir. 2022). \u201cStockholders do not have standing to\n\nsue under Section 10(b) and Rule 10b\u20135 when the company whose\n\nstock they purchased is negatively impacted by the material\n\nmisstatement of another company, whose stock they do not\n\npurchase.\u201d Ontario Pub. Serv. Emps. Union Pension Tr. Fund\n\nv. Nortel Networks Corp., 369 F.3d 27, 34 (2d Cir. 2004).\n\n\u201cSection 10(b) standing does not depend on the significance\n\nor directness of the relationship between two companies.\n\nRather, the question is whether the plaintiff bought or sold\n\nthe securities about which the misstatements were made.\u201d\n\nFrutarom, 54 F.4th at 88.\n\n Defendants contend that Lead Plaintiff does not have\n\nstatutory standing to challenge Financial Statements Nos. 1-\n\n2 and 4 and King Mountain Statements Nos. 1-4 under Section\n\n10(b) and Rule 10b-5 because (1) those Statements were made\n\nbefore the Merger when Hut 8 shares were not yet available,\n\n(2) those Statements are about USBTC, and (3) Lead Plaintiff\n\nbought shares in Hut 8, not USBTC. 9 (See Mem. at 29-30; CAC\n 8F\n\n\n\n\n9Defendants do not dispute that Lead Plaintiff has Section 10(b) standing\nto challenge Financial Statement No. 3 because it was made in the December\n19, 2023, 10-Q \u2013 after the November 30, 2023, Merger and the same day\n\n 22\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 23 of 78\n\n\n\n\u00b6\u00b6 1, 16.) Hence, the Court must determine whether Lead\n\nPlaintiff \u201cbought or sold the securities about which the\n\nmisstatements were made.\u201d Frutarom, 54 F.4th at 88. For the\n\nreasons below, the Court concludes that Lead Plaintiff does\n\nnot have Section 10(b) standing to challenge Financial\n\nStatements Nos. 1-2 and 4 or King Mountain Statements Nos. 2-\n\n4, but that Lead Plaintiff has Section 10(b) standing to\n\nchallenge King Mountain Statement No. 1.\n\n Defendants rely on Menora Mivtachim Insurance Ltd.\n\nv. Frutarom Industry Ltd., in which purchasers of a post-\n\nacquisition company\u2019s securities sued the target company\n\nunder Section 10(b) based on pre-merger statements made by\n\nthe target company about itself. See 54 F.4th at 84. The\n\nSecond Circuit held that \u201cpurchasers of a security of an\n\nacquiring company do not have standing under Section 10(b) to\n\nsue the target company for alleged misstatements the target\n\ncompany made about itself prior to the merger\u201d because those\n\nmisstatements were not \u201cabout\u201d the company in which\n\nplaintiffs owned shares. Id. at 88. District courts applying\n\nFrutarom have likewise held that plaintiffs lacked Section\n\n\n\n\nthat Lead Plaintiff began purchasing Hut 8 stocks. (See Mem. at 30; CAC\n\u00b6\u00b6 59, 66; Dkt. No. 28-1 (Lead Plaintiff\u2019s Damages Analysis and Holdings);\nDec. 2023 10-Q.) See, e.g., In re CarLotz, Inc. Sec. Litig., No. 21 Civ.\n5906, 2024 WL 1348749, at *4-7 (S.D.N.Y. Mar. 29, 2024) (plaintiff lacked\nSection 10(b) standing to challenge pre-merger, but not post-merger,\nstatements).\n\n 23\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 24 of 78\n\n\n\n10(b) standing to challenge pre-merger statements about a\n\ntarget company made by the special purpose acquisition\n\ncompany (\u201cSPAC\u201d) that took the target company public when the\n\nplaintiffs owned securities in and sued the SPAC. See In re\n\nCarLotz, 2024 WL 1348749, at *4, 6 (rejecting plaintiffs\u2019\n\nargument that statements about the target company pertained\n\nto the post-merger entity because the statements were\n\nincorporated into the SPAC\u2019s SEC filings \u201cin respect of the\n\nproposed merger\u201d).\n\n Lead Plaintiff argues that because the Merger was a\n\nmerger of equals, not an acquisition like the mergers in\n\nFrutarom or CarLotz, the pre-Merger misstatements about USBTC\n\nare necessarily misstatements about Hut 8. (See Opp\u2019n. at 27-\n\n28.) Further, Lead Plaintiff acquired Hut 8 shares and is\n\nsuing Hut 8 (whereas in Frutarom plaintiffs bought shares in\n\nthe acquiring company and sued the target subsidiary), and\n\nHut 8 and the Individual Defendants acting on Hut 8\u2019s behalf\n\npublished the misstatements (whereas in Frutarom the target\n\ncompany made the alleged misstatements about itself). (See\n\nid. at 27-29.) Because the CarLotz plaintiffs owned shares in\n\nand sued the entity that made the alleged misstatements (the\n\nSPAC), Lead Plaintiff argues that CarLotz\u2019s holding goes\n\nbeyond Frutarom\u2019s ruling by suggesting that \u201cwho made the\n\n\n\n 24\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 25 of 78\n\n\n\nstatement is inconsequential to the standing analysis.\u201d (Id.\n\nat 29.)\n\n The parties have not cited any cases, and the Court is\n\nnot aware of any, where a court applied Frutarom\u2019s reasoning\n\nto an action where plaintiffs purchased shares in a post-\n\nmerger-of-equals entity and challenged pre-merger statements\n\nabout a pre-merger entity. Moreover, Lead Plaintiff has not\n\ncited any cases, and the Court is not aware of any, where a\n\ncourt considered who made the alleged misstatement within\n\nFrutarom\u2019s framework. Indeed, Frutarom reiterated the Supreme\n\nCourt\u2019s warning against \u201can \u2018endless case-by-case erosion\u2019 of\n\nthe purchaser-seller rule by creating exceptions\u201d and\n\nundertaking a \u201c\u2018shifting and highly fact-oriented\u2019 inquiry.\u201d\n\n54 F.4th at 86-87 (quoting Blue Chip Stamps, 421 U.S. at 755).\n\nAccordingly, the Court rejects Lead Plaintiff\u2019s argument that\n\nthe Court should consider that the Registration Statement\n\ncontaining the Statements was published by Hut 8 and the\n\nIndividual Defendants acting on Hut 8\u2019s behalf. (See Opp\u2019n.\n\nat 28.)\n\n At least one court applying Frutarom has held that\n\npurchasers of a post-acquisition company\u2019s securities had\n\nstanding to challenge pre-merger statements when it was\n\n\u201cplausible that some of the pre-merger statements concerned\n\n[the] post-merger [company].\u201d Point12 Diversified Fund, LP\n\n 25\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 26 of 78\n\n\n\nv. TMC The Metals Co., No. 21 Civ. 5991, 2025 WL 1920340, at\n\n*11 (E.D.N.Y. July 11, 2025). In so holding, the Point12 court\n\nrelied upon allegations that the challenged press release was\n\na joint statement in which defendants \u201cdescribed the\n\nvaluation of the \u2018combined company;\u2019\u201d stated that the \u201cmerger\n\n\u2018transaction\u2019\u201d included $330 million in funding; and stated\n\nthat the post-merger company was \u201cthe ultimate answer to [the\n\nSPAC\u2019s] thorough search for meaningful ESG impacts combined\n\nwith tremendous financial upside.\u201d Id. The court, conversely,\n\nfound that plaintiffs lacked Section 10(b) statutory standing\n\nto challenge pre-merger statements that \u201cplainly concerned\u201d\n\nthe target company, which \u201cwere about the assets and\n\nexpenditures of [the] pre-merger [target company]\u201d and \u201cnever\n\nmentioned\u201d the post-merger company.\u201d Id. The court held that\n\nit was irrelevant for the standing analysis that the SPAC\n\nmade those statements in its SEC filing, since \u201c[w]hat matters\n\nis that the alleged misstatements were about [the target\n\ncompany].\u201d Id. (emphasis in original).\n\n Here, the Court finds that Financial Statements Nos. 1-\n\n2 and 4 and King Mountain Statements Nos. 2-4 were about\n\nUSBTC, not Hut 8, but that King Mountain Statement No. 1\n\nplausibly concerned Hut 8. See id.\n\n Financial Statements Nos. 1-2 are within the section on\n\nUSBTC\u2019s Consolidated Financial Statements and pertain solely\n\n 26\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 27 of 78\n\n\n\nto USBTC\u2019s past financial performance and USBTC\u2019s \u201cbelie[f]\u201d\n\nthat it would have enough funding to meet operating and\n\ncapital requirements for at least twelve months. (See Initial\n\nRegistration Statement at F-7; 1st Amend. at F-7; 2d Amend.\n\nat F-12; 3d Amend. at F-12; 4th Amend. at F-8; 5th Amend. at\n\nF-8; 6th Amend. at F-8; 7th Amend. at F-8; Prospectus at F-\n\n8.) Similarly, Financial Statement No. 4 is within the\n\nsection on \u201cManagement\u2019s Discussion and Analysis of Financial\n\nCondition and Results of Operations of USBTC\u201d and concerns\n\nonly USBTC\u2019s past financial performance and its\n\n\u201canticipat[ion]\u201d that it would not continue to incur net\n\nlosses for the foreseeable future. (Initial Registration\n\nStatement at 158; 1st Amend. at 172; 2d Amend. at 183; 3d\n\nAmend. at 184; 4th Amend. at 182; 5th Amend. at 183; 6th\n\nAmend. at 185; 7th Amend. at 185; Prospectus at 185.)\n\n Likewise, King Mountain Statements Nos. 2-4 concern only\n\nUSBTC and not post-merger Hut 8. King Mountain Statement No. 2\n\nappears in the \u201cInformation About USBTC\u201d section and touts\n\nKing Mountain\u2019s Echo facility\u2019s ability to \u201cdraw up to 100%\n\nof the energy\u201d that the neighboring wind farm generates. (See\n\nInitial Registration Statement at 132; 1st Amend. at 141; 2d\n\nAmend. at 151; 3d Amend. at 153; 4th Amend. at 153; 5th Amend.\n\nat 154; 6th Amend. at 155; 7th Amend. at 155; Prospectus at\n\n155.) King Mountain Statements Nos. 3-4 appear in the \u201cRisks\n\n 27\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 28 of 78\n\n\n\nRelating to USBTC\u2019s Business\u201d section. King Mountain\n\nStatement No. 3 discloses risk factors related to the\n\nelectrical grids on which USBTC relies, and King Mountain\n\nStatement No. 4 discloses the risk of internet disruptions at\n\nUSBTC. (See Initial Registration Statement at 46, 58; 1st\n\nAmend. at 47, 61; 2d Amend. at 49, 63; 3d Amend. at 49, 63;\n\n4th Amend. at 48, 62; 5th Amend. at 49, 63; 6th Amend. at 49,\n\n64; 7th Amend. at 49, 64; Prospectus at 49, 64.) Therefore,\n\nLead Plaintiff does not have Section 10(b) statutory standing\n\nto challenge Financial Statements Nos. 1-2 and 4 or King\n\nMountain Statements Nos. 2-4, as those pre-Merger Statements\n\nare about USBTC.\n\n King Mountain Statement No. 1, however, is within the\n\nsection on \u201cQuestions and Answers About the Business\n\nCombination,\u201d and specifically answers the question \u201c[w]hy\n\nare the two companies proposing the Business Combination\u201d\n\nunder the header \u201c[i]mproving [Hut 8\u2019s] energy expertise and\n\nhedging capabilities.\u201d That Statement discusses the\n\nattributes USBTC \u201cwill bring . . . to [Hut 8], which will\n\nenhance [Hut 8\u2019s] ability to better plan around stable and\n\npredictable energy usage and mitigate fluctuating prices\n\nacross markets.\u201d (Registration Statement at 1-2.) Therefore,\n\nthe Court finds that Lead Plaintiff \u201cbought . . . the\n\n\n\n 28\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 29 of 78\n\n\n\nsecurities about which [King Mountain Statement No. 1] [was]\n\nmade.\u201d Frutarom, 54 F.4th at 88.\n\n In sum, Lead Plaintiff has Section 10(b) statutory\n\nstanding to challenge King Mountain Statement No. 1 because\n\nit was about Hut 8. Further, Lead Plaintiff has Section 10(b)\n\nstatutory standing to challenge Financial Statement No. 3\n\nbecause it was made after the Merger. Lead Plaintiff, however,\n\ndoes not have Section 10(b) statutory standing to challenge\n\nthe other Statements because they were about USBTC and made\n\nbefore the Merger. Accordingly, the Court GRANTS the Motion\n\nto Dismiss Count III as it pertains to Financial Statements\n\nNos. 1-2 and 4 and King Mountain Statements Nos. 2-4. Because\n\nLead Plaintiff does not have standing to allege a primary\n\nviolation under Section 10(b), the Court also GRANTS the\n\nMotion to Dismiss Count IV as it pertains to Financial\n\nStatements Nos. 1-2 and 4 and King Mountain Statements\n\nNos. 2-4.\n\n B. APPLICABILITY OF RULE 9(b) TO SECURITIES ACT\n CLAIMS\n\n Unlike Exchange Act Section 10(b) claims, Securities Act\n\nSection 11 claims need not allege scienter, and thus need not\n\nsound in fraud. See In re Morgan Stanley, 592 F.3d at 359\n\n(\u201cIssuers are subject to \u2018virtually absolute\u2019 liability under\n\n[S]ection 11, while the remaining potential defendants under\n\n\n 29\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 30 of 78\n\n\n\n[S]ections 11 and 12(a)(2) [e.g., underwriters and statutory\n\nsellers] may be held liable for mere negligence.\u201d). This rule\n\nobtains because Section 10(b) imposes liability, through Rule\n\n10b-5, for making a material untrue statement or omission,\n\nwhereas Section 11 imposes liability when registration\n\nstatements contain a material untrue statement or omission.\n\nCompare 17 C.F.R. \u00a7 240.10b-5(b), with 15 U.S.C. \u00a7 77k.\n\n Lead Plaintiff asserts that the Securities Act Claims\n\nare based on negligence and strict liability, such that the\n\nheightened pleading standard for fraud under Rule 9(b) does\n\nnot apply. (See CAC \u00b6\u00b6 154, 168; Opp\u2019n. at 6.) See Pappas\n\nv. Qutoutiao Inc., No. 23 Civ. 1233, 2024 WL 4588491, at *1\n\n(2d Cir. Oct. 28, 2024) (\u201c[T]he Rule 8 notice pleading\n\nstandard applies where the plaintiff alleges negligent\n\npreparation of the registration statement and prospectus,\n\nrather than fraudulent preparation, . . . or where the\n\ncomplaint explicitly does not allege fraud.\u201d (internal\n\nquotation marks omitted)). Defendants state, without further\n\nexplanation, that the Securities Act Claims must comply with\n\nRule 9(b) because all Lead Plaintiff\u2019s claims sound in fraud.\n\n(See Mem. at 9.)\n\n A Securities Act plaintiff \u201ccannot avoid the strictures\n\nof Rule 9(b) by the mere expedient of disclaiming that its\n\nclaims sound in fraud.\u201d Pappas, 2024 WL 4588491, at *2. Hence,\n\n 30\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 31 of 78\n\n\n\na Section 11 claim is subject to Rule 9(b) despite assertions\n\nthat it sounds in negligence or strict liability when \u201cthe\n\ngravamen of the complaint is plainly fraud and no effort is\n\nmade to show any other basis for the claims.\u201d Rombach, 355\n\nF.3d at 172 (quoting In re Stac Elecs. Sec. Litig., 89 F.3d\n\n1399, 1405 n.2 (9th Cir. 1996) (quotation marks omitted))\n\n(Section 11 claim sounded in fraud because \u201cthe wording and\n\nimputations of the complaint are classically associated with\n\nfraud\u201d). Conversely, plaintiffs \u201cmay retain the application\n\nof the Rule 8 notice pleading standard by expressly pleading\n\nnegligence, disclaiming fraud, eschewing language in its\n\nSection 11 . . . claim[] implying fraud or the elements\n\nthereof, and separating allegations supporting fraud claims\n\nfrom allegations supporting negligence claims.\u201d Pappas, 2024\n\nWL 4588491, at *2 (when allegations \u201cwould be evaluated under\n\nRule 8 if contained in a stand-alone complaint alleging\n\nviolations only of the Securities Act,\u201d they \u201cwill not be\n\nheld to a higher standard because Plaintiff also exercised\n\nhis right to sue Defendants for securities fraud under the\n\nExchange Act\u201d).\n\n Here, the Court finds that the Lead Plaintiff\u2019s\n\nSecurities Act Claims do not sound in fraud. Counts I and II\n\n\u201care framed in the classic language of negligence and strict\n\nliability.\u201d Id. Lead Plaintiff alleges that Ho, Leverton, and\n\n 31\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 32 of 78\n\n\n\nGenoot \u201chad a duty to make a reasonable investigation\u201d to\n\nensure that the statements in the Registration Statement were\n\ntruthful and did not omit material facts to make the\n\nstatements \u201cnot false or misleading,\u201d and that those\n\nDefendants failed their duty. (CAC \u00b6 163.) Further, the CAC\n\n\u201cexpressly disclaims fraud, scienter, and the intent of\n\nDefendants to defraud investors and painstakingly segregates\n\nthe fraud and negligence claims.\u201d Pappas, 2024 WL 4588491, at\n\n*2 (Securities Act claims sounded in negligence where each\n\n\u201cclaim is set forth under its own heading and incorporates\n\nonly certain factual allegations such that . . . the\n\nSecurities Act claims expressly do not incorporate the\n\nallegations supposedly supporting a finding of scienter and\n\nreliance\u201d); see also In re iQIYI, Inc. Sec. Litig., No. 20\n\nCiv. 01830, 2024 WL 4362509, at *22 (E.D.N.Y. Sept. 30, 2024)\n\n(\u201cAlthough the Exchange Act claims and Securities Act claims\n\nshare common factual allegations, the allegations contained\n\nin the Securities Act section of the [complaint] provide an\n\nalternative basis of liability \u2013 namely,\n\nnegligence . . . .\u201d). Accordingly, the Court will analyze\n\nCounts I and II under Rule 8\u2019s pleading standard. See Pappas,\n\n2024 WL 4588491, at *1 (\u201cNothing in Rule 9 or in this Court's\n\nprior decision in Rombach forecloses pleading Section 10(b)\n\nfraud and Section 11 negligence as alternatives with the\n\n 32\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 33 of 78\n\n\n\nformer claim to be governed by Rule 9(b) and the latter by\n\nRule 8.\u201d).\n\n C. MATERIAL MISREPRESENTATION OR OMISSION\n\n A plaintiff must allege a material untrue statement or\n\nomission to state a claim under Securities Act Section 11 and\n\nExchange Act Section 10(b). See City of Westland Police &\n\nFire Ret. Sys. v. MetLife, Inc., 129 F. Supp. 3d 48, 88\n\n(S.D.N.Y. 2015) (alleged misstatements \u201cfail under Section 11\n\nfor the same principal reason that they fail under Section\n\n10(b) \u2014 [plaintiff] has not alleged adequately that\n\n[defendant] made a material misrepresentation or omission\u201d).\n\n Here, the Section 11 claim challenges Financial\n\nStatements Nos. 1-2 and 4 and King Mountain Statements\n\nNos. 1-4. Although not subject to Rule 9(b)\u2019s heightened\n\npleading standard, \u201cthe complaint must still allege a false\n\nor misleading statement or omission in more than conclusory\n\nterms.\u201d Harris v. AmTrust Fin. Servs., Inc., 135 F. Supp. 3d\n\n155, 170 (S.D.N.Y. 2015), aff'd, 649 F. App'x 7 (2d Cir.\n\n2016); see also Omnicare, Inc. v. Laborers Dist. Council\n\nConst. Indus. Pension Fund, 575 U.S. 175, 194 (2015) (to state\n\na Section 11 claim, the complaint \u201cmust identify particular\n\n(and material) facts going to the basis for the issuer's\n\nopinion . . . whose omission makes the opinion statement at\n\nissue misleading to a reasonable person reading the statement\n\n 33\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 34 of 78\n\n\n\nfairly and in context\u201d). Lead Plaintiff has Section 10(b)\n\nstanding to challenge King Mountain Statement No. 1 and\n\nFinancial Statement No. 3. In accordance with Rule 9(b) and\n\nthe PSLRA, the CAC \u201cmust specify the false or misleading\n\nstatement about which it complains and must allege the reason\n\nor reasons why the statement is false or misleading.\u201d Harris,\n\n135 F. Supp. 3d at 170.\n\n The Court first outlines the legal principles it will\n\nuse to analyze whether the CAC pleaded a material misstatement\n\nor omission under Section 11 or Section 10(b). See In re Scot.\n\nRe Grp. Sec. Litig., 524 F. Supp. 2d 370, 399 (S.D.N.Y. 2007)\n\n(\u201cFor the same reasons the Complaint adequately pleads\n\nfalsity under 10(b) and 10b\u20135, the Complaint adequately\n\nalleges material misstatements under [S]ection 11 and\n\n[S]ection 12(a) (2).\u201d).\n\n 1. Legal Standards\n\n a) Falsity\n\n To allege a misstatement, the plaintiff \u201cmust allege\n\nadequately that the statement is untrue.\u201d City of Westland\n\nPolice, 129 F. Supp. 3d at 67 (internal quotation marks\n\nomitted). To allege an omission, the plaintiff must allege\n\nthat the omitted fact was material and necessary to render\n\nanother statement not misleading or that the defendant had a\n\nduty to disclose. See Basic Inc. v. Levinson, 485 U.S. 224,\n\n 34\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 35 of 78\n\n\n\n239 n.17 (1988). To be actionably misleading, there must be\n\na \u201csufficiently close nexus\u201d between the statement and the\n\nallegedly omitted material information. In re Omega\n\nHealthcare Invs., Inc. Sec. Litig., 563 F. Supp. 3d 259, 272\n\n(S.D.N.Y. 2021). Further, a defendant cannot be liable when\n\nthe \u201callegedly undisclosed material information is in fact\n\nreadily accessible in the public domain.\u201d In re KeySpan Corp.\n\nSec. Litig., 383 F.Supp.2d 358, 377 (E.D.N.Y.2003). Finally,\n\nan actionable misstatement is one that \u201cwas false at the time\n\nit was made.\u201d In re Lululemon Sec. Litig., 14 F.Supp.3d 553,\n\n571 (S.D.N.Y.2014) (emphasis in original).\n\n b) Materiality\n\n A misstatement or omission is material if \u201cthere is a\n\nsubstantial likelihood that a reasonable person would\n\nconsider [the stated or omitted facts] important in deciding\n\nwhether to buy or sell shares of stock.\u201d Operating Local 649\n\nAnnuity Trust Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d\n\n86, 92\u201393 (2d Cir. 2010) (internal quotation marks omitted);\n\nsee also In re Morgan Stanley, 592 F.3d at 360 (\u201cThe\n\ndefinition of materiality is the same for [Section 11] as it\n\nis under [S]ection 10(b) . . . .\u201d). Hence, materiality is a\n\nmixed question of law and fact, such that a complaint may not\n\nbe dismissed on a Rule 12(b)(6) motion based on immateriality\n\nunless the challenged statements \u201care so obviously\n\n 35\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 36 of 78\n\n\n\nunimportant to a reasonable investor that reasonable minds\n\ncould not differ on the question of their importance.\u201d City\n\nof Westland Police, 129 F. Supp. 3d at 66-67.\n\n c) Statements Categorically Not False or\n Material\n\n \u201cCertain types of statements are categorically incapable\n\nof being \u2018false\u2019 or \u2018misleading\u2019\u201d because \u201cno reasonable\n\ninvestor would rely on them.\u201d Hawes v. Argo Blockchain plc,\n\nNo. 23 Civ. 7305, 2024 WL 4451967, at *3 (S.D.N.Y. Oct. 9,\n\n2024).\n\n First, forward-looking statements accompanied by risk-\n\ndisclosing language are generally not misleading or material.\n\nThe PSLRA creates a \u201csafe harbor\u201d for forward-looking\n\nstatements for Exchange Act and Securities Act claims. See 15\n\nU.S.C. \u00a7 77z\u20132(c) (Securities Act); id. \u00a7 78u\u20135(c) (Exchange\n\nAct). As relevant here, both rules provide that a forward-\n\nlooking statement is inactionable when it is identified as\n\nforward-looking and is accompanied by \u201cmeaningful cautionary\n\nstatements identifying important factors that could cause\n\nactual results to differ materially.\u201d 15 U.S.C. \u00a7 77z\u2013\n\n2(c)(1); id. \u00a7 78u\u20135(c)(1); see also Slayton v. Am. Exp. Co.,\n\n604 F.3d 758, 766 (2d Cir. 2010). Generally, a statement is\n\nidentified as forward-looking through the \u201cuse of linguistic\n\ncues like \u2018we expect\u2019 or \u2018we believe,\u2019 when combined with an\n\n\n 36\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 37 of 78\n\n\n\nexplanatory description of the company's intention to thereby\n\ndesignate a statement as forward-looking.\u201d Id. at 769\n\n(internal quotation marks omitted). Moreover, meaningful\n\ncautionary language is \u201cnot boilerplate\u201d and \u201cconvey[s]\n\nsubstantive information.\u201d Id. at 722. Similarly, courts have\n\nadopted a \u201cbespeaks caution\u201d doctrine, pursuant to which\n\n\u201calleged misrepresentations in a stock offering are\n\nimmaterial as a matter of law\u201d if no \u201creasonable investor\n\ncould consider them important in light of adequate cautionary\n\nlanguage set out in the same offering.\u201d Rombach, 355 F.3d at\n\n173 (internal quotation marks omitted).\n\n Second, \u201cgeneral statements about reputation, integrity,\n\nand compliance with ethical norms are inactionable\n\n\u2018puffery,\u2019\u201d because they are \u201ctoo general to cause a\n\nreasonable investor to rely upon them.\u201d City of Pontiac\n\nPolicemen's & Firemen's Ret. Sys. v. UBS AG, 752 F.3d 173,\n\n183 (2d Cir. 2014) (internal quotation marks omitted); see\n\nalso Ladmen Partners, Inc. v. Globalstar, Inc., No. 07 Civ.\n\n0976, 2008 WL 4449280, at *13 (S.D.N.Y. Sept. 30, 2008)\n\n(\u201c[E]xpressions of corporate optimism couched in subjective\n\nterms of belief, expectation, and intention . . . . signals\n\nto prospective investors that the predictions of the Company\n\nmay not come to fruition.\u201d).\n\n\n\n 37\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 38 of 78\n\n\n\n Third, there are narrower circumstances in which a\n\nstatement of opinion, rather than fact, is actionable under\n\nthe securities laws. See City of Westland Police, 129 F. Supp.\n\n3d at 68-69. Opinions often include \u201cqualifying language\n\n(like \u2018I believe\u2019 or \u2018I think\u2019) that conveys a lack of\n\ncertainty about the thing being expressed [and] marks the\n\nstatement as reflecting the speaker's impression or point of\n\nview.\u201d New England Carpenters Guaranteed Annuity & Pension\n\nFunds v. DeCarlo, 122 F.4th 28, 40-41 (2d Cir. 2023); see\n\nalso Carvelli v. Ocwen Fin. Corp., 934 F.3d 1307, 1329 (11th\n\nCir. 2019) (recognizing \u201ca fair amount of overlap\u201d in\n\n\u201cdiscussions of . . . opinions, and forward-looking\n\nstatements,\u201d with both \u201clead[ing] to the same bottom-line\n\nquestion: Did [defendant] make . . . a false representation\n\nthat a reasonable investor would have relied on in light of\n\nthe total mix of information available?\u201d). A \u201csincere\n\nstatement of pure opinion is not an \u2018untrue statement of\n\nmaterial fact,\u2019 regardless [of] whether an investor can\n\nultimately prove the belief wrong.\u201d Omnicare, 575 U.S. at\n\n186.\n\n There are three circumstances, however, where a\n\nstatement of opinion may be actionable: (1) \u201cthe speaker did\n\nnot hold the belief she professed,\u201d (2) the opinion contained\n\nuntrue \u201cembedded statements of fact,\u201d or (3) the opinion omits\n\n 38\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 39 of 78\n\n\n\nfacts \u201cmak[ing] [the] statement of opinion . . . misleading\n\nto an ordinary investor.\u201d Id. at 185-87; see also Tongue\n\nv. Sanofi, 816 F.3d 199, 214 (2d Cir. 2016) (applying Omnicare\n\nto Exchange Act claims). Opinions omitting facts can mislead\n\nbecause, in the context of SEC filings, reasonable investors\n\n\u201cproperly may assume that expressions of opinion contained\n\ntherein convey facts about how the speaker has formed the\n\nopinion.\u201d City of Westland Police, 129 F. Supp. 3d at 70\n\n(internal quotations omitted).\n\n To plead that an opinion is untrue, the plaintiff must\n\n\u201cplead facts that, if true, would be sufficient to show that\n\nthe speaker did not \u2018actually hold[] the stated belief.\u2019\u201d\n\nCity of Westland Police, 129 F. Supp. 3d at 69 (quoting\n\nOmnicare 575 U.S. at 184)). To plead that an opinion contains\n\nan embedded untrue statement of fact, the plaintiff must show\n\nthat \u201cthe embedded fact is not one as to which reasonable\n\nminds can differ.\u201d New England Carpenters, 122 F.4th at 42\n\n(2d Cir. 2023). To plead that an opinion is misleading because\n\nof an omission, the plaintiff must \u201ccall into question the\n\nissuer\u2019s basis for offering the opinion.\u201d City of Westland\n\nPolice, 129 F. Supp. 3d at 70 (internal quotation marks\n\nomitted). When a plaintiff challenges omissions in opinion\n\nstatements in SEC filings, the plaintiff must also allege\n\nthat omitted \u201cfacts conflict with what a reasonable investor\n\n 39\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 40 of 78\n\n\n\nwould take from the statement.\u201d Id. at 72 (internal quotation\n\nmarks omitted).\n\n 2. Financial Statements\n\n The CAC alleges that the Financial Statements were\n\nmaterially false or misleading because they misled investors\n\nthat USBTC was financially sound enough to sustain operations\n\nfor twelve months and that its cash flows were improving.\n\n(See CAC \u00b6 69.) The Court finds that the CAC failed to plead\n\nthat the Financial Statements were material misstatements or\n\nomissions because the only evidence of falsity the CAC alleges\n\nare disclosures and projections in the SEC filings containing\n\nthe Financial Statements and a statement made at a Hut 8\n\nRetreat held several weeks after the most recent Financial\n\nStatement, which are insufficient under Rule 8 or Rule 9(b)\u2019s\n\npleading standard. (See CAC \u00b6\u00b6 70, 75, 81.) Regardless, the\n\nFinancial Statements are inactionable because they are\n\nforward-looking statements accompanied by significant\n\ncautionary language and statements of opinion. Finally, the\n\nCAC fails to plead an Item 303 violation because it does not\n\nidentify any financial information that was not disclosed.\n\n Accordingly, on the basis of the following discussion,\n\nthe Court GRANTS the Motion to Dismiss Counts I and II (the\n\nSecurities Act Claims) as to Financial Statements Nos. 1-2\n\n\n\n 40\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 41 of 78\n\n\n\nand 4 and Counts III and IV (the Exchange Act Claims) as to\n\nFinancial Statement No. 3.\n\n a) Falsity\n\n First, the CAC asserts that the Financial Statements\n\nwere misleading considering USBTC\u2019s disclosed historic\n\nfinancial statements and overly optimistic financial\n\nprojections. (See CAC \u00b6\u00b6 70-79.) Regarding USBTC\u2019s ability to\n\nsustain operations for another twelve months, Lead Plaintiff\n\ncontends that USBTC\u2019s current assets to current liabilities\n\nratio and negative operating cash flows contained in the\n\nProspectus show that USBTC could not have continued\n\noperations for a year. (See id. \u00b6\u00b6 71-74.) But in reaching\n\nthis conclusion, the CAC relies on disclosed financial\n\ninformation, which the CAC does not allege was false. (See\n\nProspectus at 185, 224.) See In re Hardinge, Inc. Sec. Litig.,\n\n696 F. Supp. 2d 309, 323 (W.D.N.Y. 2010) (no falsity when\n\nplaintiffs did not allege \u201cthat any of the [embedded]\n\nfinancial information reported was incorrect\u201d). \u201c[A]\n\nviolation of federal securities law cannot be premised upon\n\na company's disclosure of accurate historical data.\u201d Boca\n\nRaton Firefighters & Police Pension Fund v. Bahash, 506 F.\n\nApp'x 32, 39 (2d Cir. 2012) (quoting In re Sofamor Danek\n\nGroup, Inc., 123 F.3d 394, 401 n. 3 (6th Cir. 1997) (internal\n\nquotations marks omitted)). To the extent the CAC alleges\n\n 41\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 42 of 78\n\n\n\nthat the Financial Statements omitted these financial\n\ndisclosures, Defendants cannot be liable for omitting\n\ndisclosed information. See In re KeySpan Corp., 383 F.Supp.2d\n\nat 377; In re Bank of Am. AIG Disclosure Sec. Litig., 980 F.\n\nSupp. 2d 564, 577 (S.D.N.Y. 2013), aff\u2019d, 566 F. App'x 93 (2d\n\nCir. 2014) (\u201cReasonable investors thus had ready access to\n\nthe very information that the plaintiffs assert should have\n\nbeen disclosed.\u201d).\n\n The Court is not persuaded by Lead Plaintiff\u2019s argument\n\nthat, despite USBTC\u2019s financial disclosures, the Financial\n\nStatements were misleading because expert analysis would be\n\nrequired for the average investor to understand USBTC\u2019s\n\nfinancial condition. (See Opp\u2019n. at 7-8.) In the cases Lead\n\nPlaintiff cites, defendants\u2019 disclosures did not include\n\nreadily ascertainable information undercutting the alleged\n\nmisstatements. See Sec. & Exch. Comm\u2019n v. Medallion Fin.\n\nCorp., No. 21 Civ. 11125, 2024 WL 4227753, at *10 (S.D.N.Y.\n\nSept. 18, 2024) (routine financial disclosures in SEC filings\n\ndid not render the allegedly fraudulent valuation of\n\nsubsidiary immaterial because those disclosures did not\n\ninclude the company\u2019s \u201cthird-party solicitations, cherry-\n\npicking of a valuation specialist, or disputes with its\n\nauditor\u201d); In re Chi. Bridge & Iron Co. N.V. Sec. Litig., No.\n\n17 Civ. 1580, 2020 WL 1329354, at *7 (S.D.N.Y. Mar. 23, 2020)\n\n 42\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 43 of 78\n\n\n\n(despite analyzing public information, stock-analyst report\n\nwas a corrective disclosure because the report discussed\n\nquestionable accounting practices that were not disclosed).\n\n Moreover, the CAC alleges that USBTC\u2019s projected free\n\ncash flow and projected EBITDA and EBITDA Margin for calendar\n\nyear 2023 were overly optimistic considering USBTC\u2019s negative\n\noperating cash flow experienced in Fiscal 2023 and actual\n\nEBITDA and EBITDA Margin it achieved in Fiscal 2023. Hence,\n\nLead Plaintiff contends, those over-optimistic projections\n\nfurther support falsity of the Financial Statements. (See CAC\n\n\u00b6\u00b6 76-79; 7th Amend. at 103; Prospectus at 103.) But\n\nimmediately following the EBITDA, EBITDA Margin, and free\n\ncash flow projections, the Seventh Amendment and Prospectus\n\ndisclose \u201cmaterial assumptions\u201d Defendants relied upon \u201cin\n\narriving at USBTC\u2019s projected financial information.\u201d (7th\n\nAmend. at 103-04; Prospectus at 103.) Further, in that\n\nsection, the Seventh Amendment and Prospectus cautioned that\n\nwhile \u201cUSBTC believe[d]\u201d the material assumptions \u201cwere\n\nreasonable at the time the projected financial information\n\nwas prepared,\u201d those assumptions \u201cmay not reflect actual\n\nfuture conditions,\u201d such that the projections should not \u201cbe\n\nrelied upon as a current forecast of the near-term results\n\nthat USBTC may achieve.\u201d (7th Amend. at 104; Prospectus at\n\n104.) Defendants cannot be liable \u201con the basis of statements\n\n 43\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 44 of 78\n\n\n\nthat clearly \u2018bespeak caution.\u2019\u201d See Luce v. Edelstein, 802\n\nF.2d 49, 56 (2d Cir. 1986) (affirming dismissal of Section\n\n10(b) claim when challenged SEC filing \u201cmade it quite clear\n\nthat its projections of potential cash and tax benefits were\n\n\u2018necessarily speculative in nature\u2019 and that \u2018[n]o assurance\n\n[could] be given that these projections [would] be\n\nrealized\u2019\u201d); In re NovaGold Res. Inc. Sec. Litig., 629 F.\n\nSupp. 2d 272, 293, 295 (S.D.N.Y. 2009) (dismissing Section 11\n\nclaim when challenged \u201ccost figure and economic viability\n\nprediction\u201d were accompanied by a list of \u201cthe Project's\n\nexpected costs based on a \u2018base case\u2019 of assumptions about\n\nmetals prices, as well as \u2018estimates of annual production and\n\ncash costs\u2019\u201d).\n\n Second, the CAC contends that the Financial Statements\n\nwere misleading because Leverton allegedly stated during a\n\nHut 8 retreat held in mid-January 2024 that \u201cthe Merger saved\n\nUSBTC from bankruptcy,\u201d revealing USBTC\u2019s true financial\n\ncondition. (CAC \u00b6 81.) But this assertion \u2013 made several\n\nweeks after the December 19, 2023, 10-Q, the latest SEC filing\n\ncontaining a Financial Statement \u2013 does not support that the\n\nFinancial Statements were false at the time they were made.\n\nSee San Leandro Emergency Med. Grp. Profit Sharing Plan\n\nv. Philip Morris Cos., Inc., 75 F.3d 801, 812 (2d Cir. 1996)\n\n(failure to plead contemporaneous falsity in Section 10(b)\n\n 44\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 45 of 78\n\n\n\nclaim when alleged misstatement that retail sales were\n\ndeclining at a rate of 2.5 percent was followed by an\n\nannouncement three weeks later that sales were declining at\n\na rate of 8.3 percent); In re CIT Grp., Inc. Sec. Litig., 349\n\nF. Supp. 2d 685, 690-91 (S.D.N.Y. 2004) (failure to plead\n\ncontemporaneous falsity in Section 11 claim when defendants\n\nincreased loan loss reserves three weeks after completing an\n\ninitial public offering).\n\n b) Forward-Looking Statements\n\n Regardless, each Financial Statement comprises an\n\ninactionable forward-looking statement accompanied by\n\ncautionary language.\n\n First, all Financial Statements are forward-looking\n\nstatements of financial performance and identified as such.\n\nSee 15 U.S.C. \u00a7 77z-2(i)(1)(C); id. \u00a7 78u-5(i)(1)(C);\n\nSlayton, 604 F.3d at 766-67. Each SEC filing containing a\n\nFinancial Statement included a disclaimer that \u201c[f]orward-\n\nlooking statements generally are identified by the\n\nwords . . . \u2018anticipate\u2019 . . . [and] \u2018believe.\u2019\u201d (Initial\n\nRegistration Statement at 25, 1st Amend. at 23; 2d Amend. at\n\n24; 3d Amend. at 24; 4th Amend. at 23; 5th Amend. at 23; 6th\n\nAmend. at 23; 7th Amend. at 23; Prospectus at 23; Dec. 2023\n\n10-Q at 3.) Financial Statements Nos. 1-3 state that USBTC\n\n\u201cbelieves\u201d that current cash on hand, subsequent debt and\n\n 45\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 46 of 78\n\n\n\nequity financings, and/or proceeds from the sales of\n\ncryptocurrency and ongoing operations \u201cwill be sufficient\u201d to\n\nmeet operating and capital requirements for the next twelve\n\nmonths. Financial Statement No. 4 states that USBTC \u201cdoes not\n\nanticipate it will continue to incur net losses for the\n\nforeseeable future.\u201d See, e.g., In re SunEdison, Inc. Sec.\n\nLitig., 300 F. Supp. 3d 444, 464 (S.D.N.Y. 2018) (statement\n\nthat \u201c[w]e believe our liquidity will be sufficient to support\n\nour operations for the next twelve months\u201d was forward-\n\nlooking).\n\n Lead Plaintiff contends that the Financial Statements\n\nare not forward-looking because they misrepresent present\n\nfacts. (See Opp\u2019n. at 12.) But the only embedded present fact\n\nin Financial Statements Nos. 1-3 is the amount of \u201ccurrent\n\ncash on hand,\u201d which was disclosed. The availability and\n\namount of \u201csubsequent equity and debt financings\u201d (Fin.\n\nStatement No. 1) and the amount of \u201cproceeds from the sale of\n\ncryptocurrency and ongoing operations\u201d (Fin. Statements\n\nNos. 2-3) plainly refer to future sources of funds. Further,\n\nLead Plaintiff contends that Financial Statement No. 4\n\nmisrepresents the present fact that \u201cUSBTC\u2019s trend of\n\nincurring net losses had not improved and would have\n\ncontinued.\u201d (Opp\u2019n. at 12.) But Financial Statement No. 4\n\nacknowledges that USBTC\u2019s net losses had not improved at the\n\n 46\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 47 of 78\n\n\n\ntime of the Statement\u2019s publication. The Statement in full\n\nreads: \u201cUSBTC has incurred net losses since its inception but\n\ndoes not anticipate it will continue to incur net losses for\n\nthe foreseeable future.\u201d USBTC\u2019s prediction that it would not\n\ncontinue to incur net losses embodies a future statement. See\n\nIn re NovaGold Res., 629 F. Supp. 2d at 292 (\u201cAny projection\n\nor forward-looking statement necessarily has its basis in\n\ncurrent conditions, but this does not change the fact that it\n\nuses those current conditions to make some kind of prediction\n\nabout the future.\u201d).\n\n Second, each Statement is accompanied by meaningful\n\ncautionary statements identifying important factors that\n\ncould cause actual results to differ materially. See 15 U.S.C.\n\n\u00a7 77z-2(c)(1)(A)(i); id. \u00a7 78u-5(c)(1)(A)(i). In Financial\n\nStatement No. 1, USBTC professed that it believed \u201cits\n\ncurrent cash on hand and subsequent debt and equity\n\nfinancings\u201d would be sufficient to sustain operations for a\n\nyear. Regarding subsequent financings, the Initial\n\nRegistration Statement and the First, Second, and Third\n\nAmendments warned that \u201cthere can be no assurance that\n\nadditional funding will be available to USBTC for the\n\ndevelopment of its business, which will require the\n\ncommitment of substantial resources,\u201d and cautioned that\n\n\u201cpotential investors should consider that USBTC may be unable\n\n 47\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 48 of 78\n\n\n\nto . . . raise sufficient funds in the capital markets to\n\neffectuate its business plan.\u201d (Initial Registration\n\nStatement at 39; 1st Amend. at 40; 2d Amend. at 42; 3d Amend.\n\nat 42.)\n\n In Financial Statements Nos. 2-3, USBTC asserted that it\n\nbelieved \u201cits current cash on hand, proceeds from the sale of\n\ncryptocurrency and ongoing operations\u201d would be sufficient to\n\nsustain operations for a year. Regarding the sale of\n\ncryptocurrency and USBTC\u2019s operations, the Prospectus and the\n\nFourth, Fifth, Sixth, and Seventh Amendments warned that\n\n\u201cpotential investors should consider that USBTC may be unable\n\nto . . . successfully implement or execute its business\n\nplan.\u201d (4th Amend. at 41; 5th Amend. at 42; 6th Amend. at 42;\n\n7th Amend. at 42; Prospectus at 42.) Those SEC filings also\n\ncautioned that USBTC\u2019s Bitcoin mining business could be\n\nnegatively impacted by, among other things, the availability\n\nof and rising costs of Bitcoin miners, changes to validating\n\nblockchain transactions that could reduce demand for USBTC\u2019s\n\nservices, and any failure in critical plants, equipment,\n\npower supplies, or network connectivity. (4th Amend. at 42-\n\n45; 5th Amend. at 42-45; 6th Amend. at 42-45; 7th Amend. at\n\n42-45.) The 2023 December 10-Q contains the above warnings,\n\nas it incorporates the Prospectus by reference. (See 2023\n\nDec. 10-Q at 44.)\n\n 48\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 49 of 78\n\n\n\n In Financial Statement No. 4, USBTC stated that it \u201cdoes\n\nnot anticipate it will continue to incur net losses for the\n\nforeseeable future.\u201d Regarding the possibility that USBTC\n\nwould continue to incur losses the Registration Statement\n\nwarned that \u201cUSBTC is an early-stage company with limited\n\noperating history and may never become profitable\u201d and that,\n\n\u201c[t]o date, USBTC has incurred losses . . . and may never\n\nbecome profitable.\u201d (Initial Registration Statement at 38;\n\n1st Amend. at 40; 2d Amend. at 41-42; 3d Amend. at 42; 4th\n\nAmend. at 41; 5th Amend. at 41-42; 6th Amend. at 41-42; 7th\n\nAmend. at 41-42; Prospectus at 41-42.) As discussed above,\n\nthe Registration Statement also described the risks that\n\nUSBTC would be unable to secure funding and that various\n\ncontingencies would negatively impact its Bitcoin mining\n\noperations.\n\n Accordingly, the Court finds that each Financial\n\nStatement is accompanied by meaningful cautionary statements\n\nthat render them inactionable under the PSLRA safe harbor\n\nprovision and the bespeaks caution doctrine. See In re Gilat\n\nSatellite Networks, Ltd., No. 02 Civ. 1510, 2005 WL 2277476,\n\nat *11 (E.D.N.Y. Sept. 19, 2005) (\u201c[T]he Second Circuit has\n\nat times applied the bespeaks caution doctrine in conjunction\n\nwith the PSLRA safe harbor without distinguishing between the\n\ntwo.\u201d).\n\n 49\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 50 of 78\n\n\n\n c) Opinions\n\n The Financial Statements are also inactionable\n\nstatements of opinion. First, the Financial Statements are\n\nopinions regarding USBTC\u2019s \u201cbelie[f]\u201d that it would have\n\nsufficient funds to maintain operations for twelve months and\n\n\u201canticipat[ion]\u201d that it would not continue to incur net\n\nlosses for the foreseeable future. See New England\n\nCarpenters, 122 F.4th at 40-41.\n\n Second, even viewed in the light most favorable to the\n\nLead Plaintiff, the CAC does not adequately allege that\n\nDefendants could not have believed what they professed. Lead\n\nPlaintiff argues that Defendants could not have believed the\n\nopinions because (1) Defendants were provided USBTC\u2019s due\n\ndiligence information beginning in November 2022 \u2013 several\n\nmonths before the first Financial Statement was published on\n\nFebruary 13, 2023 \u2013 and (2) Leverton stated that the Merger\n\nsaved USBTC from bankruptcy at a Hut 8 retreat on January 14-\n\n17, 2024 \u2013 several weeks after the last Financial Statement\n\nwas published on December 19, 2023. (See Opp\u2019n. at 9-10; CAC\n\n\u00b6\u00b6 80-81, 125; Prospectus at 85.) But, as explained above,\n\nthose facts do not sufficiently allege that the Defendants\n\ndid not believe their opinions at the time the Financial\n\nStatements were made. See In re Lululemon, 14 F.Supp.3d at\n\n578 (statements about the company's expectation regarding\n\n 50\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 51 of 78\n\n\n\nproduct quality were not false or misleading because the\n\ncomplaint failed to allege \u201cany facts that tend to show that\n\nthe company did not believe this expectation at the time\u201d).\n\nRegarding Leverton\u2019s alleged statement made weeks after the\n\nfinal Financial Statement, \u201c[i]t is not sufficient . . . to\n\nallege that an opinion was unreasonable, irrational,\n\nexcessively optimistic, [or] not borne out by subsequent\n\nevents.\u201d Lopez v. CTPartners Exec. Search Inc., 173 F. Supp.\n\n3d 12, 24 (S.D.N.Y. 2016) (internal quotation marks omitted).\n\n Third, Lead Plaintiff fails to allege that the opinions\n\ncontained an embedded statement of untrue fact. As explained\n\nabove, the only embedded statements of present fact in the\n\nFinancial Statements were USBTC\u2019s \u201ccurrent cash on hand\u201d\n\n(Fin. Statements Nos. 1-3) and \u201cUSBTC has incurred net losses\n\nsince its inception\u201d (Fin. Statement No. 4.) The SEC filings\n\ncontaining each Statement disclosed USBTC\u2019s current cash on\n\nhand. Lead Plaintiff does not allege that those disclosures\n\nwere false or that USBTC had not incurred net losses since\n\nits inception.\n\n Fourth, Lead Plaintiff does not plead facts showing that\n\nthe opinions contained omissions that \u201cconflict with what a\n\nreasonable investor would take from the statement itself.\u201d\n\nCity of Westland Police, 129 F. Supp. 3d at 72 (internal\n\nquotations omitted). Given the litany of financial and risk\n\n 51\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 52 of 78\n\n\n\ndisclosures described above, a reasonable investor would not\n\nhave taken the Financial Statements as guarantees. See\n\nOmnicare, 575 U.S. at 190 (\u201c[A]n investor reads each statement\n\nwithin such a document, whether of fact or of opinion, in\n\nlight of all its surrounding text, including hedges,\n\ndisclaimers, and apparently conflicting information.\u201d).\n\n d) Item 303\n\n The CAC alleges that Financial Statement No. 4 violated\n\nItem 303 of SEC Regulation S-K, as that Statement misleadingly\n\nsuggested that USBTC\u2019s trend of incurring net losses would\n\nnot continue, the disclosed historical financial statements\n\nsupported that USBTC would continue to incur net losses, USBTC\n\nwas in imminent danger of bankruptcy, and these \u201cundisclosed\n\nfacts were known trends\u201d likely to have an adverse impact on\n\nHut 8\u2019s revenues and income from operations. (CAC \u00b6 106.)\n\n A defendant can be liable under Section 11 for Item 303\n\nviolations. See Panther Partners Inc. v. Ikanos Commc\u2019ns,\n\nInc., 681 F.3d 114, 120 (2d Cir. 2012). Item 303 requires an\n\nissuer to \u201c[d]escribe any known trends or uncertainties that\n\nhave had or that are reasonably likely to have a material\n\nfavorable or unfavorable impact on net sales or revenues or\n\nincome from continuing operations.\u201d 17 C.F.R.\n\n\u00a7 229.303(b)(2)(ii). Therefore, a defendant may be liable\n\nunder Item 303 if it failed to disclose a trend that \u201cis both\n\n 52\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 53 of 78\n\n\n\n[1] presently known to management and [2] reasonably likely\n\nto have material effects on the registrant\u2019s financial\n\ncondition or results of operations.\u201d Litwin v. Blackstone\n\nGrp., L.P., 634 F.3d 706, 716 (2d Cir. 2011) (quoting SEC\n\nRelease No. 6835, 54 Fed. Reg. 22427, 22429 (May 18, 1989),\n\n1989 WL 1092885, at *4 (internal quotation marks omitted)).\n\n Further, Item 303 subsection (a) provides that the\n\n\u201cdiscussion and analysis must focus specifically on material\n\nevents and uncertainties known to management that are\n\nreasonably likely to cause reported financial information not\n\nto be necessarily indicative of future operating results or\n\nof future financial condition.\u201d 17 C.F.R. \u00a7 229.303(a). In\n\nother words, Item 303\u2019s \u201cessential obligation\u201d is explaining\n\n\u201c[i]f there has been an important change in [the] company\u2019s\n\nbusiness or environment that significantly or materially\n\ndecreases the predictive value of [the] reported results.\u201d\n\nLowinger v. Pzena Inv. Mgmt., Inc., 341 F. App'x 717, 720 (2d\n\nCir. 2009) (quoting Oxford Asset Mgmt., Ltd. v. Jaharis, 297\n\nF.3d 1182, 1192 (11th Cir. 2002) (internal quotation marks\n\nomitted)).\n\n Moreover, \u201c[k]nowledge of a trend is an essential\n\nelement triggering disclosure under Item 303.\u201d In re Noah\n\nEduc. Holdings, Ltd. Sec. Litig., No. 08 Civ. 9203, 2010 WL\n\n1372709, at *6 (S.D.N.Y. Mar. 31, 2010). Although \u201cSection 11\n\n 53\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 54 of 78\n\n\n\nclaims generally do not require pleading scienter, Item 303\u2019s\n\nrequirement of knowledge requires that a plaintiff plead,\n\nwith some specificity, facts establishing that the defendant\n\nhad actual knowledge of the purported trend.\u201d Blackmoss\n\nInvestments Inc. v. ACA Capital Holdings, Inc., No. 07 Civ.\n\n10528, 2010 WL 148617, at *9 (S.D.N.Y. Jan. 14, 2010).\n\n Here, the CAC fails to allege a violation of Item 303\n\nbecause it \u201cfail[s] to identify any adverse economic event or\n\ntrend that occurred prior to the [Merger] that was not\n\ndisclosed in the Offering Documents.\u201d Schaffer v. Horizon\n\nPharma PLC, No. 16 Civ. 1763, 2018 WL 481883, at *14 (S.D.N.Y.\n\nJan. 18, 2018). Indeed, the CAC asserts that Financial\n\nStatement No. 4 omitted \u201cundisclosed facts,\u201d but in the same\n\nsentence refers to \u201chistorical financial statements,\u201d which,\n\nas discussed above, were disclosed. (CAC \u00b6 106.) Financial\n\nStatement No. 4 likewise disclosed that \u201cUSBTC has incurred\n\nnet losses since its inception.\u201d\n\n Additionally, the CAC fails to plead that the Defendants\n\nhad actual knowledge that USBTC\u2019s net losses would continue.\n\nThe CAC alleges that the Individual Defendants knew that USBTC\n\nfaced imminent bankruptcy and had experienced negative cash\n\nflows by virtue of their positions within USBTC, Legacy Hut,\n\nand Hut 8 and their access to information exchanged during\n\nthe Merger\u2019s diligence period. The CAC posits that the\n\n 54\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 55 of 78\n\n\n\nIndividual Defendants\u2019 knowledge is imputable to Hut 8. (See\n\nCAC \u00b6\u00b6 125, 140.) These allegations, however, do not support\n\nthat the Individual Defendants knew that USBTC would continue\n\nto incur net losses at the time Financial Statement No. 4 was\n\npublished. As discussed above, at a Hut 8 retreat on January\n\n14-17, 2024, Leverton allegedly stated that the Merger saved\n\nUSBTC from bankruptcy. That occurred more than a month after\n\nthe Forms S-8 were published, which constituted the most\n\nrecent SEC filings containing Financial Statement\n\nNo. 4. It does not support a finding that the Individual\n\nDefendants knew that USBTC would continue to incur net losses.\n\n ***\n\n Accordingly, the Court GRANTS the Motion to Dismiss the\n\nSecurities Act Claims as to Financial Statements Nos. 1-2 and\n\n4 (Counts I and II) and the Exchange Act Claims as to\n\nFinancial Statement No. 3 (Counts III and IV) because Lead\n\nPlaintiff has failed to plead that any Financial Statement is\n\nactionable under either the Securities Act or the Exchange\n\nAct. Therefore, Plaintiff has likewise failed to state a claim\n\nfor control person liability under the Securities Act or\n\nExchange Act. See In re Weight Watchers Int\u2019l Inc. Sec.\n\nLitig., 504 F. Supp. 3d 224, 252 (S.D.N.Y. 2020) (\u201cIn light\n\nof the dismissal of the Section 11 and Section 10(b) claims\n\nagainst all Defendants, Plaintiffs\u2019 Sections 15 and 20(a)\n\n 55\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 56 of 78\n\n\n\nclaims, which rely on the same underlying factual\n\nallegations, are also dismissed.\u201d).\n\n 3. King Mountain Statements\n\n The CAC alleges that the King Mountain Statements\n\nNos. 1-3 are materially misleading because they failed to\n\ndisclose energy issues that had materialized at the King\n\nMountain JV when those Statements were made. (See CAC \u00b6\u00b6 91,\n\n100.) Likewise, the CAC alleges that King Mountain Statement\n\nNo. 4 is materially misleading because it failed to disclose\n\nthat internet connectivity problems had materialized. (See\n\nid. \u00b6\u00b6 92, 100.) As explained above, Lead Plaintiff has\n\nSection 10(b) standing to challenge only King Mountain\n\nStatement No. 1. The Court finds that King Mountain Statement\n\nNo. 1 is inactionable puffery under both the Securities Act\n\nand the Exchange Act, and that Lead Plaintiff failed to plead\n\nthat King Mountain Statement No. 2 is materially false or\n\nmisleading under the Securities Act. The Court finds,\n\nhowever, that the CAC adequately pleaded a material omission\n\nunder Section 11 of the Securities Act as to King Mountain\n\nStatements Nos. 3-4. The CAC did not plead a violation of\n\nItem 105 as to King Mountain Statement No. 4, however, because\n\nthe CAC does not demonstrate that Ho, Genoot, Leverton, or\n\nHut 8 actually knew about the alleged internet problems.\n\n\n\n 56\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 57 of 78\n\n\n\n Accordingly, the Court GRANTS the Motion to Dismiss the\n\nLead Plaintiffs\u2019 Securities Act Claims as to King Mountain\n\nStatement Nos. 1-2 and 4 (insofar as Statement No. 4 is\n\nalleged to violate Item 105) (Counts I and II) and the\n\nExchange Act Claims as to King Mountain Statement No. 1\n\n(Counts III and IV). The Court finds, however, that the CAC\n\nadequately pleaded a material omission as to King Mountain\n\nStatements Nos. 3-4.\n\n a) Puffery\n\n King Mountain Statement No. 1 is inactionable puffery.\n\nThat Statement \u2013 asserting that the \u201cUSBTC team will bring\n\nsignificant leadership in energy orientation . . . which will\n\nenhance [Hut 8\u2019s] ability to better plan around\u201d stable energy\n\nusage and fluctuating prices - is included in two places in\n\nthe Registration Statement. First, as an answer to the\n\nquestion \u201c[w]hy are the two companies proposing the Business\n\nCombination\u201d as an example of \u201c[k]ey strategic advantages of\n\nthe Business Combination - [i]mproving [Hut 8\u2019s] energy\n\nexpertise and hedging capabilities.\u201d (Registration Statement\n\nat 1-2.) Second, in the section listing \u201c[t]he [Legacy Hut]\n\nBoard\u2019s Reasons for the Business Combination.\u201d That section\n\nstated that \u201cthe [Legacy Hut] Board considered a number of\n\nfactors, including . . . the [Legacy Hut] Board\u2019s belief that\n\nthe USBTC team brings significant leadership in energy\n\n 57\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 58 of 78\n\n\n\norigination, development, demand response, hedging, grid\n\nstabilization, and analytics significantly enhancing [Legacy\n\nHut\u2019s] ability to mitigate fluctuating energy prices across\n\nmarkets.\u201d (Initial Registration Statement at 80-81; 1st\n\nAmend. at 84-85; 2d Amend. at 86-87; 3d Amend. at 86-87; 4th\n\nAmend. at 85-86; 5th Amend. at 86-87; 6th Amend. at 87-88;\n\n7th Amend. at 87-88; Prospectus at 87-88.)\n\n \u201cUp to a point, companies must be permitted to operate\n\nwith a hopeful outlook.\u201d Rombach, 355 F.3d at 174; see also\n\nIBEW Loc. Union No. 58 v. Royal Bank of Scotland Grp., PLC,\n\n783 F.3d 383, 392 (2d Cir. 2015) (statement that acquisition\n\nwas \u201coff to a promising start\u201d was puffery). The assertions\n\nthat the Legacy Hut Board\u2019s \u201cbelief\u201d that USBTC would bring\n\n\u201csignificant leadership\u201d thus \u201cenhancing\u201d the ability to\n\nmitigate energy price fluctuations is \u201ctoo open-ended and\n\nsubjective to constitute a guarantee upon which a reasonable\n\ninvestor would rely.\u201d Gross v. GFI Grp., Inc., 784 F. App\u2019x\n\n27, 30 (2d Cir. 2019) (internal quotation marks omitted); see\n\nalso In re Star Gas Sec. Litig., No. 04 Civ. 1766, 2006 WL\n\n8439191, at *10 n.2 (D. Conn. Aug. 21, 2006) (\u201cVague\n\nstatements about industry leadership . . . are classic\n\npuffery . . . .\u201d (internal quotation marks omitted)).\n\n Accordingly, King Mountain Statement No. 1 cannot\n\nsustain a claim under Sections 11 or 15 of the Securities Act\n\n 58\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 59 of 78\n\n\n\nor a claim under Sections 10(b) or 20(a) of the Exchange Act,\n\nand the Court GRANTS the Motion to Dismiss Counts I-IV as to\n\nKing Mountain Statement No. 1.\n\n b) Falsity\n\n Lead Plaintiff failed to allege facts showing that King\n\nMountain Statement No. 2 is materially false or misleading.\n\nIn full, that Statement reads, with the challenged portion\n\nbolded:\n\n Renewable energy sources powering USBTC\u2019s owned and\n operated sites include renewable energy and zero\n carbon emission energy from wind, hydro, and nuclear\n sources. As of January 31, 2023: . . . The Echo\n facility at King Mountain is co-located behind the\n meter at a wind farm, and at peak wind generation\n periods can draw up to 100% of the energy the wind\n project produces to power mining and hosting; the\n rest of the time, the energy is sourced from ERCOT\n which includes more than 40% zero carbon emission\n sources.\n\n(Initial Registration Statement at 132; see CAC \u00b6 89.) The\n\nCAC contends that King Mountain Statement No. 2 is materially\n\nmisleading because it \u201cfailed to disclose the energy issues\n\nthat had already materialized.\u201d (Id. \u00b6 91.) In support, the\n\nCAC alleges that (1) CW 1 had daily discussions about the\n\n\u201congoing energy issues\u201d at the King Mountain JV; (2) Genoot\n\ncomplained about the King Mountain JV\u2019s efficiency; and (3)\n\nCW 1 saw evidence of energy issues in the Hashrate failure\n\nand energy usage reports. (Id. \u00b6\u00b6 93-96.) Even when viewed in\n\nthe light most favorable to the Lead Plaintiff, none of the\n\n 59\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 60 of 78\n\n\n\nforegoing allegations are relevant to the King Mountain JV\u2019s\n\nrenewable energy sources. Further, the CAC does not dispute\n\nthe veracity of the assertion that as of January 31, 2023,\n\n\u201cat peak wind generation periods [the Echo facility] can draw\n\nup to 100% of the energy the wind project produces to power\n\nmining and hosting.\u201d Because there is not a \u201csufficiently\n\nclose nexus\u201d between King Mountain Statement No. 2 and the\n\nallegedly omitted information regarding power grid failures,\n\nthe Court finds that the CAC failed to plead a material\n\nomission as to that Statement. In re Omega Healthcare, 563 F.\n\nSupp. 3d at 272.\n\n Accordingly, the Court GRANTS the Motion to Dismiss the\n\nSecurities Act Claims as to King Mountain Statement No. 2\n\n(Counts I-II).\n\n c) Risks of Internet and Energy Problems\n\n Lead Plaintiff sufficiently pleaded, however, that King\n\nMountain Statements Nos. 3-4 were material omissions because\n\nthe CAC sufficiently alleges that the King Mountain JV\n\nexperienced energy and internet problems that were knowable\n\nbefore the Merger and that King Mountain Statements Nos. 3-4\n\ndid not disclose.\n\n To state a Securities Act Section 11 claim based on a\n\nmaterial omission, plaintiffs must sufficiently plead that\n\nthe \u201callegedly omitted facts both existed, and were known or\n\n 60\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 61 of 78\n\n\n\nknowable, at the time of the offering.\u201d Lin v. Interactive\n\nBrokers Grp., Inc., 574 F. Supp. 2d 408, 421 (S.D.N.Y. 2008).\n\nA fact is knowable if \u201cthe relevant event had already\n\ntranspired at the time of the offering.\u201d Winter v. Stronghold\n\nDigital Mining, Inc., 686 F. Supp. 3d 295, 306 (S.D.N.Y.\n\n2023). Critically, \u201cwhether a fact was \u2018knowable\u2019 . . . is\n\nnot the same as whether a defendant \u2018knew,\u2019 or \u2018should have\n\nknown\u2019 of that fact.\u201d Id. (rejecting argument that plaintiff\n\nfailed to plead defendants\u2019 knowledge because \u201cknowledge is\n\nnot an element of a plaintiff's prima facie case for Section\n\n11\u201d (internal quotation marks omitted)).\n\n The bulk of the CAC\u2019s allegations regarding the King\n\nMountain JV\u2019s energy and internet problems rests on CW 1\u2019s\n\nallegations. Courts in the Second Circuit allow \u201cplaintiffs\n\nto rely on unnamed sources so long as \u2018[the unnamed sources]\n\nare described in the complaint with sufficient particularity\n\nto support the probability that a person in the position\n\noccupied by the source would possess the information\n\nalleged.\u2019\u201d New Jersey Carpenters Health Fund v. Royal Bank of\n\nScotland Grp., 709 F.3d 109, 123\u201324 (2d Cir. 2013) (quoting\n\nNovak v. Kasaks, 216 F.3d 300, 314 (2d Cir. 2000) (applying\n\nNovak to Securities Act claims). Here, the CAC describes CW\n\n1 and pleads the CW 1\u2019s allegations with sufficient\n\nparticularity for the Court to credit them at this stage of\n\n 61\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 62 of 78\n\n\n\nthe litigation. See In re Tufin Software Techs. Ltd. Sec.\n\nLitig., No. 20 Civ. 5646, 2022 WL 596861, at *7-8 (S.D.N.Y.\n\nFeb. 25, 2022) (when applying Rule 8 to Section 11 claim,\n\nholding that confidential witness allegations were reliable\n\nbecause witnesses held positions at defendant company during\n\nthe operative period, suggesting witnesses would have had\n\nknowledge of the subject of the alleged misstatement).\n\n First, the CAC pleads specific facts showing that CW 1\n\nwould have knowledge of the King Mountain JV\u2019s energy and\n\ninternet problems during the relevant period. The CAC asserts\n\nthat CW 1 worked as a data analyst at Hut 8 in the months\n\nbefore the Merger and thereafter, that CW 1 had \u201cdaily\n\ndiscussions with the Director of Infrastructure before the\n\nMerger about the ongoing energy issues at the King Mountain\n\nJV,\u201d and that CW 1\u2019s duties included daily tracking of miner\n\noutages. (CAC \u00b6 93; see id. \u00b6 95.) Defendants argue that the\n\nCourt should discount CW 1\u2019s allegations as \u201cuncorroborated\n\nstatements\u201d and insufficiently particular. (Mem. at 10, 18.)\n\nBut the cases Defendants cite adjudicate Section 10(b) claims\n\nsubject to Rule 9(b)\u2019s and the PSLRA\u2019s heightened pleading\n\nstandard for securities fraud. See, e.g., Long Miao v. Fanhau,\n\nInc., 442 F. Supp 3d 774, 790, 800 (S.D.N.Y. 2020). Under the\n\nless rigorous Rule 8 standard, however, the CAC\u2019s allegations\n\n\n\n 62\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 63 of 78\n\n\n\nare sufficiently particular. See In re Tufin Software Techs.,\n\n2022 WL 596861, at *7-8.\n\n Second, the CAC pleads specific facts regarding the King\n\nMountain JV\u2019s energy and internet problems, which are\n\nsufficient to support an inference under Rule 8 that the\n\nproblems occurred and were knowable. The CAC contends that CW\n\n1 knew that Genoot complained about the King Mountain JV\n\nminers\u2019 efficiency during general meetings; that the mining\n\ndata CW 1 analyzed showed that there were \u201cenergy issues in\n\nthe Hashrate failure and energy usage reports;\u201d that CW 1\n\nknew that King Mountain JV had inefficient miners that impeded\n\nthe ability to properly mine; and that during CW 1\u2019s time\n\nwith the Company there were \u201coften dips\u201d in network service\n\nwith \u201cseveral outages and network failures,\u201d which were\n\n\u201coften significant\u201d and caused by broken or offline miners.\n\n(Id. \u00b6\u00b6 94, 96-98.) Further, the CAC pleads that CW 1 stated\n\nthat Operations senior management directed data analysts \u201cto\n\nclassify the outages in a manner that masked their true\n\nnature,\u201d such as by characterizing the miners as \u201coverheated\u201d\n\ninstead of offline, and that \u201cover half, or more, outages\n\nwere falsely reclassified as overheated\u201d (Id. \u00b6 99.)\n\n Further, King Mountain Statements Nos. 3-4 do not\n\ndisclose that the alleged energy and internet problems\n\noccurred at the King Mountain JV. \u201c[C]autionary words about\n\n 63\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 64 of 78\n\n\n\nfuture risk cannot insulate from liability an issuer\u2019s\n\nfailure to disclose that the risk has, in fact, materialized\n\nin the past and is virtually certain to materialize again.\u201d\n\nSet Capital LLC. v. Credit Suisse Grp. AG, 996 F.3d 64, 85\n\n(2d Cir. 2021) (bank\u2019s warning that hedging activity \u201ccould\u201d\n\nimpact note prices but that bank had \u201cno reason to believe\u201d\n\nit would was materially misleading when \u201cthree episodes of\n\nmarket volatility\u201d had proved the price impact). \u201c[W]arning\n\nthat something \u2018may\u2019 occur when that event \u2018had\u2019 already\n\noccurred\u201d is a misstatement of present fact, not \u201cmere\n\nopinions of future possibilities.\u201d In re Facebook, Inc. IPO\n\nSec. & Derivative Litig., 986 F. Supp. 2d 487, 518 (S.D.N.Y.\n\n2013) (disclosure that mobile usage and product decisions\n\n\u201cmay negatively affect [defendant\u2019s] revenue\u201d were materially\n\nmisleading when those factors had adversely impacted revenue\n\nand the challenged registration statements \u201cinclude[ed]\n\npositive statements, that clashed with [defendant\u2019s] risk\n\nwarnings on the same issues\u201d); cf. In re UiPath, Inc. Sec.\n\nLitig., 755 F. Supp. 3d 498, 514 (S.D.N.Y. 2024) (statements\n\nthat allegedly failed to disclose known risks were not\n\nmisleading because the challenged disclosures \u201cwere not\n\npurely hypothetical\u201d and were accompanied by \u201cadverse\n\ncircumstances that the company was currently experiencing\u201d).\n\n\n\n 64\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 65 of 78\n\n\n\n Here, although King Mountain Statements Nos. 3-4 are\n\naccompanied by significant risk disclosures about the King\n\nMountain JV\u2019s power grid and potential internet disruptions,\n\nthose disclosures are forward-looking hypotheticals that do\n\nnot disclose that the King Mountain JV experienced energy and\n\ninternet problems. (See, e.g., Initial Registration Statement\n\nat 42, 46-47, 58.) Accordingly, the Court finds that those\n\nStatements were misleading because they omitted energy and\n\ninternet problems that materialized.\n\n Defendants argue that, even if the CAC pleaded that the\n\nKing Mountain JV experienced undisclosed energy and internet\n\nproblems, the CAC failed to plead that those problems were\n\nmaterial because (1) King Mountain is a joint venture that\n\naccounts for a small part of Hut 8\u2019s business, (2) the CAC\n\ndoes not allege a negative impact on the price of mining\n\nBitcoin, USBTC, or Hut 8 as a whole, and (3) the problems\n\nwere \u201ccommonplace connectivity issues\u201d that would be within\n\nthe a reasonable investor\u2019s common knowledge. (Reply at 4;\n\nsee also Mem. at 18.) The extent of energy and internet\n\nproblems at the King Mountain JV is a question of fact\n\ninappropriate at this stage. Further, the CAC asserts that a\n\n\u201cmajor component of USBTC\u2019s business consisted of self-mining\n\nBitcoin at its digital asset mining sites, including at the\n\nKing Mountain JV,\u201d and that \u201creliable energy sources and\n\n 65\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 66 of 78\n\n\n\ninternet access were critical to the operations of such\n\nsites.\u201d (CAC \u00b6 136; see also id. \u00b6 110.) Accordingly, taking\n\nthe CAC\u2019s allegations as true for the purposes of evaluating\n\nthe Motion, the alleged energy and internet problems at the\n\nKing Mountain JV are not \u201cso obviously unimportant to a\n\nreasonable investor that reasonable minds could not differ on\n\nthe question of their importance.\u201d City of Westland Police,\n\n129 F. Supp. 3d at 66-67 (internal quotation marks omitted).\n\nTherefore, the Court declines to dismiss Counts III and IV as\n\nto King Mountain Statements Nos. 3-4 on the basis that,\n\naccording to Defendants, those Statements are immaterial.\n\n d) Item 105\n\n The CAC alleges that King Mountain Statement No. 4\n\nviolated Item 105 of SEC Regulation S-K by misleadingly and\n\ninaccurately suggesting that internet disruptions were a\n\npotential risk when that risk had already materialized at the\n\nKing Mountain JV. (See CAC \u00b6 109.)\n\n Item 105, formerly Item 503, requires that SEC offering\n\ndocuments provide \u201ca discussion of the material factors that\n\nmake an investment in the registrant or offering speculative\n\nor risky.\u201d 17 C.F.R. \u00a7 229.105(a). Further, Item 105 requires\n\nthat the \u201cRisk Factors\u201d section \u201c[c]oncisely explain how each\n\nrisk affects the registrant or the securities being offered.\u201d\n\nId. \u00a7 229.105(b).\n\n 66\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 67 of 78\n\n\n\n Whereas a claim for a material omission under Section 11\n\nrequires allegations that the omission was \u201cknowable,\u201d a\n\nclaim for a violation of Item 105 under Section 11 requires\n\nthat plaintiffs \u201cdemonstrate actual knowledge of . . . [a]\n\nrisk.\u201d In re HEXO Corp. Sec. Litig., 524 F. Supp. 3d 283,\n\n300, 302 (S.D.N.Y. 2021) (internal quotation marks omitted);\n\nsee also Lian v. Tuya Inc., No. 22 Civ. 6792, 2024 WL 966263,\n\nat *9 (S.D.N.Y. Mar. 5, 2024) (\u201cMost courts . . . have\n\nconcluded that Item 105 does impose a knowledge\n\nrequirement . . . .\u201d). A showing of actual knowledge requires\n\n\u201callegations of specific facts from which [a court] could\n\ndraw the plausible inference that defendants had actual\n\nknowledge of the [the risk] at the time the registration\n\nstatement was issued.\u201d Medina v. Tremor Video, Inc., 640 F.\n\nApp\u2019x 45, 48 (2d Cir. 2016) (internal quotation marks omitted)\n\n(discussing actual knowledge in the context of Item 303); see\n\nalso Lian, 2024 WL 966263, at *7, 9 (applying Medina\u2019s actual\n\nknowledge standard to Item 105 and holding that plaintiffs\n\nfailed to allege that defendant actually knew its customers\n\nfalsified online reviews when plaintiffs relied on public\n\nreports of fake reviews but did not allege that defendant\u2019s\n\ncustomers were involved); cf. In re Chembio Diagnostics, Inc.\n\nSec. Litig., 586 F. Supp. 3d 199, 230 (E.D.N.Y. 2022)\n\n(plaintiffs pleaded that defendant actually knew that its\n\n 67\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 68 of 78\n\n\n\nCOVID-19 test was not one hundred percent accurate when FDA\n\ninformed defendant of independent evaluation revealing\n\ninaccuracy).\n\n Generally, \u201cmanagement level\u201d employees are sufficiently\n\nsenior to \u201cserve as proxies\u201d for the corporation's mental\n\nstate. Thomas v. Shiloh Indus., Inc., No. 15 Civ. 7449, 2017\n\nWL 2937620, at *3, 3 n.1 (S.D.N.Y. July 7, 2017) (collecting\n\ncases). To determine who constitutes a management-level\n\nemployee, courts consider \u201cthe individual's relative\n\nseniority at the issuing entity and the connection between\n\nthe executive's role and the [challenged] statements.\u201d\n\nBarrett v. PJT Partners Inc., No. 16 Civ. 2841, 2017 WL\n\n3995606, at *7 (S.D.N.Y. Sept. 8, 2017).\n\n Further, \u201ccourts have held that a company's risk\n\ndisclosures are misleading in violation of Item 105 where the\n\n\u2018risk factors\u2019 reported in its Registration Statement had\n\nalready materialized by the time of its IPO . . . .\u201d Felipe\n\nv. Playstudios Inc., No. 22 Civ. 01159, 2024 WL 1380802, at\n\n*13 (D. Nev. Mar. 31, 2024) (Item 105 violation pleaded when\n\nrisk factors warned that \u201cgame may be delayed\u201d but did not\n\ndisclose that game developer faced \u201cabnormally large number\n\nof bugs\u201d and risks had \u201calready come to fruition\u201d); see also\n\nLilien v. Olaplex Holdings, Inc., 765 F. Supp. 3d 993, 1019\n\n(C.D. Cal. 2025) (Item 105 violation pleaded when risk\n\n 68\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 69 of 78\n\n\n\ndisclosures \u201cwarned of the risk of new regulations affecting\n\n[defendant\u2019s] products without disclosing the E.U. ban on\n\n[product ingredient]\u201d had already materialized); cf. Sharma\n\nv. Rent the Runway, Inc., 751 F. Supp. 3d 82, 118 (E.D.N.Y.\n\n2024) (dismissing Item 105 claim when risk disclosures\n\nincluded that the defendant company \u201c\u2018in the past incurred\u2019\n\nlosses\u201d from warned-of risk).\n\n Here, as discussed above, the CAC plausibly alleges that\n\nmaterial internet disruptions had occurred at the King\n\nMountain JV prior to the Merger and that King Mountain\n\nStatement No. 4 failed to disclose that the risk had\n\nmaterialized. The CAC, however, fails to plead that Hut 8,\n\nHo, Genoot, and Leverton had actual knowledge of the internet\n\nproblems, rather than that the problems were merely knowable.\n\nThe CAC alleges that, per CW 1, there were \u201coften dips in the\n\nnetwork service with several outages and network failures\u201d\n\nand that outages of Bitcoin miners \u201cwere often significant\n\nand caused by . . . offline miners.\u201d (CAC \u00b6\u00b6 97-98.) Further,\n\nCW 1 stated that Operations senior management directed data\n\nanalysts \u201cto classify the outages in a manner that masked\n\ntheir true nature,\u201d such as by characterizing the miners as\n\n\u201coverheated\u201d instead of offline, and that \u201cover half, or more,\n\noutages were falsely reclassified as overheated.\u201d (Id. \u00b6 99.)\n\nThe Court is not persuaded that one allegation pertaining to\n\n 69\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 70 of 78\n\n\n\nunidentified \u201csenior management\u201d without a further\n\nexplanation of the manager\u2019s (or managers\u2019) position within\n\nUSBTC and whether he or she (or they) had any involvement in\n\nthe challenged disclosures is sufficient to impute actual\n\nknowledge to Hut 8. See Barrett, 2017 WL 3995606, at *7.\n\n Although the CW 1 asserts that \u201cGenoot also complained\n\nabout the efficiency of the King Mountain JV,\u201d that allegation\n\nis made within the CAC\u2019s section on the King Mountain energy\n\nproblems and does not plausibly support that Genoot actually\n\nknew that internet issues contributed to the inefficiency.\n\n(CAC \u00b6 94.) Likewise, the Short Seller Report\u2019s generic\n\nallegation that the King Mountain JV \u201chas historically failed\n\nto provide . . . high-speed internet\u201d and allegations from a\n\nseparate proof of claim against a non-party filed in 2022 do\n\nnot support that any Defendant actually knew about King\n\nMountain JV\u2019s network disruptions when King Mountain\n\nStatement No. 4 was published. (Id. \u00b6 116; see id. \u00b6\u00b6 117-\n\n18.) See Glover v. DeLuca, No. 03 Civ. 0288, 2006 WL 2850448,\n\nat *23 (W.D. Pa. Sept. 29, 2006) (\u201cThe Court declines to\n\naccept as evidence of scienter an allegation made in a\n\nseparate lawsuit in another forum.\u201d).\n\n Accordingly, the Court GRANTS the Motion to Dismiss the\n\nSecurities Act Claims as to King Mountain Statements No. 4\n\n\n\n 70\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 71 of 78\n\n\n\n(Counts I and II), insofar as Lead Plaintiff failed to allege\n\nthat King Mountain Statement No. 4 violated Item 105.\n\n D. COUNT I: SECTION 11 REMAINING ELEMENTS\n\n The Court holds that the CAC has pleaded the remaining\n\nelements of a Section 11 violation as to King Mountain\n\nStatements Nos. 3-4: that Lead Plaintiff purchased a\n\nregistered security directly from the issuer or in the\n\naftermarket following the offering and that Hut 8, Ho, Genoot,\n\nand Leverton participated in Hut 8\u2019s offering in a manner\n\nsufficient to give rise to liability under Section 11. See In\n\nre Morgan Stanley, 592 F.3d at 359-60.\n\n First, the CAC alleged that because \u201cHut 8 was newly\n\nformed upon completion of the Merger, the only Hut 8 shares\n\navailable in the market at that time when Lead Plaintiff and\n\nthe Class acquired their shares . . . were shares issued\n\npursuant to the Registration Statement or the Forms S-8.\u201d\n\n(CAC \u00b6 166.) \u201cThat is all that is required at this preliminary\n\nstage.\u201d Saskatchewan Healthcare Employee\u2019s Pension Plan v. KE\n\nHoldings Inc., 718 F. Supp. 3d 344, 391 (S.D.N.Y. 2024)\n\n(collecting cases holding that at the pleading stage, Section\n\n11 plaintiffs need only allege that they purchased shares\n\nissued pursuant to or traceable to the public offering).\n\n Second, the CAC adequately alleges that Hut 8, Ho,\n\nGenoot, and Leverton participated in Hut 8\u2019s offering in a\n\n 71\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 72 of 78\n\n\n\nmanner sufficient to give rise to liability under Section 11,\n\nsince the CAC pleads that Hut 8 is the issuer; Ho signed the\n\nRegistration Statement and Forms S-8 and is identified as\n\nprospective director of Hut 8 in the Registration Statement;\n\nLeverton is identified as a prospective director of Hut 8 in\n\nthe Registration Statement; and Genoot signed the\n\nRegistration Statement and the Forms S-8. (See CAC \u00b6\u00b6 159-\n\n162.) See 15 U.S.C. \u00a7 77k(a)(1), (3), (b); In re Morgan\n\nStanley, 592 F.3d at 359-60.\n\n Accordingly, the Court DENIES the Motion to Dismiss\n\nCount I as to King Mountain Statements Nos. 3-4.\n\n E. COUNT II: SECTION 15\n\n Section 15 of the Securities Act creates liability for\n\nindividuals or entities that \u201ccontrol[] any person liable\u201d\n\nunder Sections 11 or 12. See 15 U.S.C. \u00a7 77o(a). To state a\n\nclaim for control person liability under Section 15, \u201ca\n\nplaintiff must allege [1] a primary violation by a controlled\n\nperson, and [2] control by the defendant of the primary\n\nviolator.\u201d In re Scottish Re Grp., 524 F. Supp. 2d at 387\n\n(internal quotation marks omitted).\n\n Here, The Court has already determined that the CAC has\n\nadequately pleaded a primary violation of Section 11 as to\n\nKing Mountain Statements Nos. 3-4. Thus, Lead Plaintiff may\n\nsucceed on the Section 15 claim if he can establish that all\n\n 72\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 73 of 78\n\n\n\nIndividual Defendants controlled Hut 8, the primary violator.\n\n(See CAC \u00b6 170.)\n\n Control for purposes of Section 15 is defined as \u201cthe\n\npower to direct or cause the direction of the management and\n\npolicies of the [primary violators], whether through the\n\nownership of voting securities, by contract, or otherwise.\u201d\n\nIn re Lehman Bros. Mortg.-Backed Sec. Litig., 650 F.3d 167,\n\n185 (2d Cir. 2011) (internal quotation marks omitted). To\n\nsurvive a Rule 12(b)(6) motion, \u201ca plaintiff must plead facts\n\nwhich support a reasonable inference that [defendants] had\n\nthe potential power to influence and direct the activities of\n\nthe primary violator.\u201d In re Deutsche Telekom AG Sec. Litig.,\n\nNo. 00 Civ. 9475, 2002 WL 244597, at *7 (S.D.N.Y. Feb. 20,\n\n2002) (internal quotation marks omitted). The \u201cact of signing\n\na registration statement\u201d is \u201ca manifestation of the signer\u2019s\n\nresponsibility for the information contained in the document\n\nand, therefore, sufficient to establish \u2018control person\u2019\n\nstatus\u201d at the pleading stage. Fed. Hous. Fin. Agency v. UBS\n\nAmericas, Inc., 858 F. Supp. 2d 306, 333 (S.D.N.Y. 2012).\n\n Here, the CAC alleges that Genoot and Ho signed each SEC\n\nfiling in which King Mountain Statements Nos. 3-4 appeared:\n\nthe Initial Registration Statement, each Amendment, and each\n\nForm S-8, which incorporated the Prospectus by reference.\n\n(See CAC \u00b6\u00b6 53, 55 58.)\n\n 73\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 74 of 78\n\n\n\n Accordingly, the CAC states a Section 15 violation as to\n\nGenoot and Ho. Further, the CAC alleges that all Individual\n\nDefendants had the power to direct Hut 8 and caused the\n\nCompany to violate Section 11 as described in Count I.\n\nSpecifically, the Individual Defendants were involved in the\n\ndaily activities of Legacy Hut or USBTC prior to the Merger\n\nand Hut 8 following the Merger, including the due diligence\n\nrelated to the Merger, and preparing and reviewing the\n\nRegistration Statement and the Forms S-8, the contents of\n\nwhich the Individual Defendants had the power to control.\n\n(See CAC \u00b6 170.) \u201cAt the pleading stage, the Court considers\n\nthis sufficient.\u201d Sharma, 751 F. Supp. 3d at 122 (denying\n\nmotion to dismiss Section 15 claim when complaint alleged\n\nthat individual defendants signed the registration statement;\n\nhad relationships with other directors, officers, and major\n\nstockholders of the primary violator; and participated in the\n\npreparation and dissemination of the challenged offering\n\ndocuments). Further, apart from arguing that the Section 15\n\nclaim fails because the CAC does not state a Section 11 claim,\n\nDefendants do not meaningfully address the Section 15 claim.\n\nSee Panther Partners Inc. v. Jianpu Tech. Inc., No. 18 Civ.\n\n9848, 2020 WL 5757628, at *17 (S.D.N.Y. Sept. 27, 2020)\n\n(denying motion to dismiss Section 15 claim when only grounds\n\n\n\n 74\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 75 of 78\n\n\n\nfor dismissal argued were based on the purported failure of\n\nSection 11 and 12 claims).\n\n Accordingly, the Motion to Dismiss Count II as to King\n\nMountain Statements Nos. 3-4 is DENIED.\n\n F. LEAVE TO AMEND\n\n Lead Plaintiff has asked the Court to grant leave to\n\namend in the event the Court finds that the CAC contains\n\ndeficiencies. (See Opp\u2019n. at 30.) When a cause of action is\n\ndismissed because of pleading deficiencies, the usual remedy\n\nis to permit repleading. See Fed. R. Civ. P. 15(a) (\u201cThe court\n\nshould freely give leave [to amend] when justice so\n\nrequires.\u201d). When a claim is dismissed as a matter of law\n\nbecause it fails to state a claim, however, repleading would\n\nbe \u201cfutile.\u201d Lucente v. Int\u2019l Bus. Mach. Corp., 310 F.3d 243,\n\n258 (2d Cir. 2002) (\u201cAn amendment to a pleading is futile if\n\nthe proposed claim could not withstand a motion to dismiss\n\npursuant to Fed. R. Civ. P. 12(b)(6).\u201d).\n\n Here, because Lead Plaintiff lacks statutory standing\n\nunder Section 10(b) of the Exchange Act to challenge Financial\n\nStatements Nos. 1-2 and 4 and King Mountain Statements\n\nNos. 2-4, the Court DENIES leave to replead Counts III and IV\n\nas to those Statements. Moreover, the Court has determined\n\nthat Financial Statements Nos. 1-4 are inactionable as a\n\nmatter of law under both the Securities Act and the Exchange\n\n 75\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 76 of 78\n\n\n\nAct because they are forward-looking statements of opinion\n\naccompanied by meaningful cautionary language. Moreover,\n\nFinancial Statement No. 4 cannot sustain a claim for\n\nviolation of Item 303 as a matter of law because the\n\nchallenged information was disclosed. Finally, King Mountain\n\nStatement No. 1 is inactionable as a matter of law under both\n\nthe Securities Act and the Exchange Act because it is\n\ncorporate puffery. Hence, the Court DENIES leave to replead\n\nCounts I-IV as to the Financial Statements and King Mountain\n\nStatement No. 1.\n\n The Court GRANTS, however, leave to replead Counts I-II\n\nas to King Mountain Statement No. 2, as Lead Plaintiff could\n\nplead facts showing that this Statement omits material\n\ninformation with \u201csufficiently close nexus\u201d to the content of\n\nthe Statement. In re Omega Healthcare, 563 F. Supp. 3d at\n\n272.\n\n Also, the Court GRANTS leave to replead Counts I-II as\n\nto an Item 105 violation via King Mountain Statement No. 4,\n\nas Lead Plaintiff could plead additional facts showing that\n\nDefendants had actual knowledge of the alleged undisclosed\n\nrisk.\n\n V. ORDER\n\n For the reasons stated above, it is hereby\n\n\n\n 76\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 77 of 78\n\n\n\n ORDERED that the motion (Dkt. No. 52) (the \u201cMotion\u201d) of\n\ndefendants Hut 8 Corp. (\u201cHut 8\u201d), Asher Genoot (\u201cGenoot\u201d),\n\nMichael Ho (\u201cHo\u201d), Jaime Leverton (\u201cLeverton\u201d), and Shenif\n\nVisram (\u201cVisram\u201d, collectively, the \u201cDefendants\u201d) to dismiss\n\nthe consolidated amended complaint (Dkt. No. 39) (the\n\n\u201cConsolidated Amended Complaint\u201d) of lead plaintiff Abhishek\n\nMaheshwari (\u201cMaheshwari\u201d) pursuant to Federal Rule of Civil\n\nProcedure 12(b)(6) is GRANTED as to Count III and Count IV in\n\ntheir entirety; it is further\n\n ORDERED that the Motion is GRANTED as to Count I and\n\nCount II as to as to Financial Statements Nos. 1-4, King\n\nMountain Statements Nos. 1-2, and King Mountain Statement\n\nNo. 4 insofar as King Mountain Statement No. 4 is alleged to\n\nviolate 17 C.F.R. \u00a7 229.105(a) (\u201cItem 105\u201d); it is further\n\n ORDERED that the Motion is DENIED as to Count I and Count\n\nII as to King Mountain Statements Nos. 3-4; and it is further\n\n ORDERED that leave to amend is GRANTED as to Count I and\n\nCount II as to King Mountain Statement No. 2 and King Mountain\n\nStatement No. 4, to the extent King Mountain Statement No. 4\n\nis alleged to violate Item 105; it is further\n\n ORDERED that leave to amend is DENIED as to all remaining\n\ndismissed claims; and it is further\n\n\n\n\n 77\n\fCase 1:24-cv-01636-VM Document 9 Filed 09/12/25 Page 78 of 78\n\n\n\n ORDERED that Maheshwari is GRANTED leave to file an\n\namended consolidated complaint no later than fourteen (14)\n\ndays from the date of this Decision and Order.\n\n\n\nSO ORDERED.\n\nDated: 12 September 2025\n New York, New York\n\n\n\n\n 78\n\f","ocr_status":1,"date_upload":"2025-11-18T16:09:51.037971-08:00","document_number":"9","attachment_number":null,"pacer_doc_id":"127038200611","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion to 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Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 1 of 26\n\n\n\n\n UNITED STATES DISTRICT COURT\n SOUTHERN DISTRICT OF NEW YORK\n\nMARK LATINO, Individually and on Behalf Case No.\nof All Others Similarly Situated,\n CLASS ACTION COMPLAINT FOR\n Plaintiff, VIOLATIONS OF THE FEDERAL\n SECURITIES LAWS\n v.\n JURY TRIAL DEMANDED\nHUT 8 CORP., JAIME LEVERTON, and\nSHENIF VISRAM,\n\n Defendants.\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 2 of 26\n\n\n\n\n Plaintiff Mark Latino (\u201cPlaintiff\u201d), individually and on behalf of all others similarly\n\nsituated, by and through his attorneys, alleges the following upon information and belief, except\n\nas to those allegations concerning Plaintiff, which are alleged upon personal knowledge.\n\nPlaintiff\u2019s information and belief is based upon, among other things, his counsel\u2019s investigation,\n\nwhich includes without limitation: (a) review and analysis of regulatory filings made by Hut 8\n\nCorp. (\u201cHut 8\u201d or the \u201cCompany\u201d) with the United States (\u201cU.S.\u201d) Securities and Exchange\n\nCommission (\u201cSEC\u201d); (b) review and analysis of press releases and media reports issued by and\n\ndisseminated by Hut 8; and (c) review of other publicly available information concerning Hut 8.\n\n NATURE OF THE ACTION AND OVERVIEW\n\n 1. This is a class action on behalf of persons and entities that purchased or otherwise\n\nacquired Hut 8 securities between November 9, 2023 and January 18, 2024, inclusive (the \u201cClass\n\nPeriod\u201d). Plaintiff pursues claims against the Defendants under the Securities Exchange Act of\n\n1934 (the \u201cExchange Act\u201d).\n\n 2. Hut 8 is a crypto currency and data mining company. The Company is engaged in\n\nBitcoin mining and hosting, managed services, energy arbitrage, and operating traditional data\n\ncenters. The Company operates computing infrastructure which mines Bitcoin and delivers\n\ncomputing services to enterprise customers.\n\n 3. Hut 8 formed following the November 2023 merger of Hut 8 Mining Corp.\n\n(\u201cLegacy Hut\u201d) and U.S. Data Mining Group, Inc. d/b/a US Bitcoin Corp. (\u201cUSBTC\u201d) (the\n\n\u201cMerger\u201d).1 USBTC held a 50% interest in a joint venture bitcoin mining facility, located in King\n\nMountain, Texas (the \u201cKing Mountain JV\u201d), which was acquired in the Merger.\n\n\n\n1\n Shareholders of Legacy Hut received, for each share held, 0.2 shares of Hut 8 common stock.\nStockholders of USBTC received, for each share of USBTC capital stock, 0.6716 shares of Hut 8\ncommon stock.\n\n\n 1\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 3 of 26\n\n\n\n\n 4. On January 18, 2024, at approximately 10:30 AM EST, J Capital Research\n\npublished a report which alleged, inter alia, that Hut 8\u2019s merger with USBTC was premised on a\n\nnumber of alleged misstatements, including (1) that the USBTC had an \u201cundisclosed related party\u201d\n\nas one of its largest shareholders, (2) that one of USBTC\u2019s core assets, the King Mountain JV,\n\n\u201chas historically failed to provide energy and high-speed internet,\u201d and (3) that the Company had\n\nmisstated certain finances of the King Mountain JV by failing to account for certain interest\n\nexpenses. Citing individuals \u201chighly familiar\u201d with USBTC, the report stated that, without the\n\nMerger, USBTC would have undergone bankruptcy and that USBTC had a value estimated to be\n\n70% less than the approximately $745 million that Hut 8 paid to acquire it.\n\n 5. On this news, Hut 8\u2019s stock price fell $2.16, or 23.3%, to close at $7.12 per share\n\non January 18, 2024, on unusually heavy trading volume.\n\n 6. Throughout the Class Period, Defendants made materially false and/or misleading\n\nstatements, as well as failed to disclose material adverse facts about the Company\u2019s business,\n\noperations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that one of\n\nUSBTC\u2019s largest shareholders is an undisclosed related party; (2) that USBTC\u2019s core asset has\n\nhistorically failed to provide energy and high-speed internet; (3) that the profitability of certain\n\nUSBTC assets were overstated; and (4) that, as a result of the foregoing, Defendants\u2019 positive\n\nstatements about the Company\u2019s business, operations, and prospects were materially misleading\n\nand/or lacked a reasonable basis.\n\n 7. As a result of Defendants\u2019 wrongful acts and omissions, and the precipitous decline\n\nin the market value of the Company\u2019s securities, Plaintiff and other Class members have suffered\n\nsignificant losses and damages.\n\n\n\n\n 2\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 4 of 26\n\n\n\n\n JURISDICTION AND VENUE\n\n 8. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange\n\nAct (15 U.S.C. \u00a7\u00a7 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17\n\nC.F.R. \u00a7 240.10b-5).\n\n 9. This Court has jurisdiction over the subject matter of this action pursuant to 28\n\nU.S.C. \u00a7 1331 and Section 27 of the Exchange Act (15 U.S.C. \u00a7 78aa).\n\n 10. Venue is proper in this Judicial District pursuant to 28 U.S.C. \u00a7 1391(b) and Section\n\n27 of the Exchange Act (15 U.S.C. \u00a7 78aa(c)). Substantial acts in furtherance of the alleged fraud\n\nor the effects of the fraud have occurred in this Judicial District. Many of the acts charged herein,\n\nincluding the dissemination of materially false and/or misleading information, occurred in\n\nsubstantial part in this Judicial District.\n\n 11. In connection with the acts, transactions, and conduct alleged herein, Defendants\n\ndirectly and indirectly used the means and instrumentalities of interstate commerce, including the\n\nUnited States mail, interstate telephone communications, and the facilities of a national securities\n\nexchange.\n\n PARTIES\n\n 12. Plaintiff Mark Latino, as set forth in the accompanying certification, incorporated\n\nby reference herein, purchased Hut 8 securities during the Class Period, and suffered damages as\n\na result of the federal securities law violations and false and/or misleading statements and/or\n\nmaterial omissions alleged herein.\n\n 13. Defendant Hut 8 is incorporated under the laws of Delaware with its principal\n\nexecutive offices located in Miami, Florida. Hut 8\u2019s common stock trade on the NASDAQ stock\n\nmarket under the symbol \u201cHUT.\u201d Prior to the Merger, Legacy Hut\u2019s common stock also traded\n\non the NASDAQ under the symbol \u201cHUT.\u201d\n\n\n 3\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 5 of 26\n\n\n\n\n 14. Defendant Jaime Leverton (\u201cLeverton\u201d) was the Company\u2019s Chief Executive\n\nOfficer (\u201cCEO\u201d) at all relevant times.\n\n 15. Defendant Shenif Visram (\u201cVisram\u201d) was the Company\u2019s Chief Financial Officer\n\n(\u201cCFO\u201d) at all relevant times.\n\n 16. Defendants Leverton and Visram (together, the \u201cIndividual Defendants\u201d), because\n\nof their positions with the Company, possessed the power and authority to control the contents of\n\nthe Company\u2019s reports to the SEC, press releases and presentations to securities analysts, money\n\nand portfolio managers and institutional investors, i.e., the market. The Individual Defendants\n\nwere provided with copies of the Company\u2019s reports and press releases alleged herein to be\n\nmisleading prior to, or shortly after, their issuance and had the ability and opportunity to prevent\n\ntheir issuance or cause them to be corrected. Because of their positions and access to material non-\n\npublic information available to them, the Individual Defendants knew that the adverse facts\n\nspecified herein had not been disclosed to, and were being concealed from, the public, and that the\n\npositive representations which were being made were then materially false and/or misleading. The\n\nIndividual Defendants are liable for the false statements pleaded herein.\n\n SUBSTANTIVE ALLEGATIONS\n\n Background\n\n 17. Hut 8 is a crypto currency and data mining company. The Company is engaged in\n\nBitcoin mining and hosting, managed services, energy arbitrage, and operating traditional data\n\ncenters. The Company operates computing infrastructure which mines Bitcoin and delivers\n\ncomputing services to its enterprise customers.\n\n 18. On November 30, 2023, Legacy Hut merged with USBTC, and the combined\n\ncompany was named Hut 8 Corp. Prior to the Merger, USBTC held assets including, inter alia, a\n\n\n\n\n 4\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 6 of 26\n\n\n\n\n50% interest in a joint venture bitcoin mining facility, located in King Mountain, Texas, King\n\nMountain JV.\n\n Materially False and Misleading\n\n Statements Issued During the Class Period\n\n 19. The Class Period begins on November 9, 2023. On that day, Hut 8 filed a Form\n\n424B3 with the SEC, which forms part of the Merger Prospectus (the \u201cProspectus\u201d) which\n\ndescribed USBTC, in relevant part, stating2:\n\n USBTC has several revenue streams: self-mining, hosting, managed infrastructure\n operations and equipment sales. Self-mining refers to all USBTC-owned machines\n that contribute computing power to mining pools in exchange for Bitcoin. Hosting\n refers to USBTC operating third party-owned machines at its sites in exchange for\n a hosting fee. Managed infrastructure operations refers to USBTC operating third-\n party-owned Bitcoin mining sites, leveraging its purpose-built site management\n software along with the curtailment platform, in exchange for a property\n management fee. Equipment sales refers to USBTC selling mining or infrastructure\n equipment to third-parties.\n\n USBTC owns and operates a Bitcoin mining facility in Niagara Falls, New York\n with access to approximately 50 MW of electricity (the \u201cAlpha Site\u201d). In December\n 2022, USBTC acquired from Compute North Member LLC (\u201cCN Member\u201d) their\n entire membership interest in TZRC LLC, representing 50% of all issued and\n outstanding membership interests in the King Mountain JV with NextEra. The King\n Mountain JV owns a Bitcoin mining site in Upton County, Texas with access to\n approximately 280 MW of electricity (the \u201cEcho Site\u201d). The Echo Site is co-located\n behind-the-meter at a wind farm.\n\n 20. The Prospectus describes the energy output available pursuant to the Merger:\n\n Renewable energy sources powering USBTC\u2019s owned and operated sites include\n renewable energy and zero carbon emission energy from wind, hydro, and nuclear\n sources. As of June 30, 2023:\n\n \uf0b7 Alpha Site at Niagara Falls is fueled by a minimum of approximately 91%\n zero carbon emission energy sources;\n\n\n\n\n2\n Unless otherwise stated, all emphasis in bold and italics hereinafter is added, and all footnotes\nare omitted.\n\n\n 5\n\fCase 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 7 of 26\n\n\n\n\n\uf0b7 Charlie Site in Nebraska is powered by more than 56% zero carbon\nemission sources, including 42.3% nuclear, 7.4% wind and 6.4% hydro; and\n\n\uf0b7 The Echo facility at King Mountain is co-located behind the meter at a wind\nfarm, and at peak wind generation periods can draw up to 100% of the energy the\nwind project produces to power mining and hosting; the rest of the time, the energy\nis sourced from ERCOT which includes more than 40% zero carbon emission\nsources.\n\n21. The Prospectus purported to warn of the risks of a loss of internet connectivity:\n\nUSBTC may face risks of Internet disruptions, which could have an adverse\neffect on the price of Bitcoin.\n\nA disruption of the Internet may affect the use of Bitcoin and subsequently the value\nof USBTC\u2019s securities. Generally, Bitcoin and USBTC\u2019s business of mining digital\nassets is dependent upon the Internet. A significant disruption in Internet\nconnectivity could disrupt a currency\u2019s network operations until the disruption is\nresolved and have an adverse effect on the price of Bitcoin and USBTC\u2019s ability to\ncontribute computing power to pools that mine Bitcoin.\n\n22. The Prospectus reported selected historical consolidated financial data of USBTC:\n\n\n\n\n 6\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 8 of 26\n\n\n\n\n 23. On December 11, 2023, the Company announced an Operations Update for\n\nNovember 2023 in a press release which reported the Company had, as of November 2023: 839\n\nMegawatts total energy capacity under management, 207,399 total deployed miners under\n\nmanagement, 75,078 Deployed miners self-mining, 166,775 deployed miners under management\n\nfor managed services, and 76,737 deployed miners under management for hosting.\n\n 24. On December 19, 2023, the Company submitted its financial results on Form 10-Q\n\nfor the quarterly period ended September 30, 2023 (the \u201c3Q23 10-Q\u201d). The 3Q23 10-Q contained\n\nthe following summary of USBTC and King Mountain JV:\n\n King Mountain JV\n\n On December 6, 2022, one of USBTC\u2019s subsidiaries acquired a 50% membership\n interest in the King Mountain JV and assumed the King Mountain JV\u2019s senior Note\n (the \u201cKing Mountain JV Senior Note\u201d). USBTC acquired the 50% membership\n interest through a competitive auction process in connection with the Chapter 11\n bankruptcy filing of Compute North. The King Mountain JV has self-mining and\n hosting operations at the King Mountain location. USBTC has concluded that\n the King Mountain JV will be accounted for with the equity method of\n accounting. USBTC\u2019s 50% portion of monthly distributions from the King\n Mountain JV will be swept to pay down the King Mountain JV Senior Note. For\n additional information on the King Mountain JV Senior Note, see below.\n\n Self-mining revenue, hosting services revenue and cost reimbursement revenues\n for the King Mountain JV was $6.7 million, $13.3 million and $12.3 million,\n respectively, for the three months ended September 30, 2023, which represented\n 100% of the King Mountain JV\u2019s revenue during the period.\n\n\n\n 7\n\fCase 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 9 of 26\n\n\n\n\n25. The 3Q23 10-Q stated the following concerning related party transactions:\n\nRelated parties are defined as entities related to the Company\u2019s directors or main\nshareholders as well as equity method investment entities. The Company provides\nservices to TZRC, an equity method investment entity (refer to Note 9 for\nadditional information on the equity method investment entity), in exchange for\nfees under a PMA.\n\n26. The 3Q23 10-Q reported income derived from King Mountain JV:\n\n\n\n\n 8\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 10 of 26\n\n\n\n\n 27. On January 5, 2024, the Company announced an Operations Update for December\n\n2023 in a press release which stated in relevant part, that the Company held, as of December 2023:\n\n839 Megawatts total energy capacity under management, 205,759 total deployed miners under\n\nmanagement, 73,943 Deployed miners self-mining, 166,347 deployed miners under management\n\nfor managed services, and 76,734 deployed miners under management for hosting.\n\n 28. The above statements identified in \u00b6\u00b6 19-27 were materially false and/or\n\nmisleading, and failed to disclose material adverse facts about the Company\u2019s business, operations,\n\nand prospects. Specifically, Defendants failed to disclose to investors: (1) that one of USBTC\u2019s\n\nlargest shareholders is an undisclosed related party; (2) that USBTC\u2019s core asset has historically\n\nfailed to provide energy and high-speed internet; (3) that the profitability of certain USBTC assets\n\nwere overstated; and (4) that, as a result of the foregoing, Defendants\u2019 positive statements about\n\nthe Company\u2019s business, operations, and prospects were materially misleading and/or lacked a\n\nreasonable basis.\n\n Disclosures at the End of the Class Period\n\n 29. On January 18, 2024, at approximately 10:30 AM EST, J Capital Research\n\npublished a report entitled \u201cThe Coming HUT Pump and Dump\u201d with a subheading which read\n\n\u201cmanagement hiding stock ownership through undisclosed related party, a stock promotor cabal,\n\nand a host of left-for-dead assets\u201d (the \u201cReport\u201d). The Report alleged that USBTC\u2019s CEO, Michael\n\nHo (\u201cHo\u201d), may be hiding ownership shares through his partner, Anna Kudrjasova, via her\n\ncompany Anaya Capital Corp.:\n\n\n\n\n 9\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 11 of 26\n\n\n\n\n 30. The Report describes how \u201c[t]his is particularly significant, because Ho has\n\ncommitted to a lock-up of 65% of his shares - but not hers. Anaya Capital appears to hold about\n\n3.7 mln shares.\u201d The Report details that Ho and Kudrjasova have been associated for nearly a\n\ndecade:\n\n\n\n\n 31. The Report also alleged that King Mountain JV \u201chas historically failed to provide\n\nenergy and high-speed internet,\u201d and described an extensive history of a lack of connectivity,\n\ndespite the fact Bitcoin mining requires constant connectivity:\n\n\n\n\n 10\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 12 of 26\n\n\n\n\n The King Mountain JV has been plagued with connectivity problems. In its 2023\n Annual Report, published on March 16, 2023, MARA reported \u201cthe company\n experienced significant production downtime in the second and third quarters\u2026and\n delays in energization at King Mountain.\u201d MARA had 60,000 miners at the facility,\n but according to a Proof of Claim MARA filed in the Compute North bankruptcy\n case, the miners were never energized. MARA\u2019s Statement of Claim said that King\n Mountain lacked a high-speed internet connection.\n\n * * *\n\n On November 23, 2022, MARA, which was the largest customer for the King\n Mountain site, filed a motion stating that Compute North at King Mountain had\n failed to energize its miners and failed to provide an adequate internet\n connection.\n\n * * *\n\n MARA also said that there was a lack of high-speed connection at the facility.\n\n * * *\n\n USBTC itself was so disgruntled that it filed suit. Just one month before buying\n the King Mountain JV, USBTC filed an action against CN King Mountain LLC\n for failing to find a location where miners could be installed and energized.\n\n * * *\n\n Our diligence suggests that the facility now uses a Starlink satellite network instead\n of a broad- band connection to access the internet. This is unheard of in the Bitcoin\n mining industry. Starlink is an expensive and unreliable choice for mining at scale.\n Said one interviewee who managed a large data center when asked if he would ever\n use Starlink as primary internet source for Bitcoin mining at scale, he said \u201cnever.\u201d\n\n 32. The Report also alleged that the Company overstates profitability by failing to\n\naccount for certain \u201cinterest expenses\u201d concerning King Mountain JV:\n\n The company is misleading on the profitability of the JV, with accounts showing\n $665,000 of profit while completely ignoring about the $3.2 mln interest expense\n incurred during the same period.\n\n\n\n\n 11\n\fCase 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 13 of 26\n\n\n\n\n33. The Report also casted doubt on to other reported financials stating:\n\nWe are confused about how many miners USBTC has. The November 2023 Hut 8\noperations update claims that USBTC had 46,225 Bitcoin miners deployed for\nOctober 2023, and yet at the end of September 2023, USBTC reported operating\nonly 30,200 miners.\n\n\n\n\n 12\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 14 of 26\n\n\n\n\n We find this ramp-up extremely unlikely, especially without disclosing new\n machine orders or deposits for new miners in USBTC\u2019s end September 2023\n balance sheet. Remaining construction in progress was far less than the typical\n purchase value for that many extra machines. Is USBTC telling the truth?\n\n 34. The Report further claimed that, without the merger with Hut 8, individual \u201chighly\n\nfamiliar\u201d with USBTC stated the USBTC would have been forced to undergo a structured\n\nbankruptcy:\n\n One person highly familiar with USBTC told us, \u201cwithout the merger, [USBTC]\n would have done a structured bankruptcy.\u201d\n\n * * *\n\n \u201cThe merger was a complete godsend for USBTC,\u201d someone deeply involved with\n the company told us. Without the merger, this person said, USBTC would have\n been bankrupt within weeks. \u201cIt was very much in the cards.\u201d In early 2023,\n USBTC gave up almost half its miners, plus $20.7 mln and some other assets, in\n an apparent default.\n\n * * *\n\n Our interviewee said that USBTC \u201cbegged\u201d NYDIG to forgive the loan but soon\n after Christ- mas was forced to surrender assets. Hut 8 managed to characterize\n this default as a $23.7 mln GAIN on debt extinguishment. But it had started out\n as a $24.2 mln LOSS that the company \u201cfixed\u201d through an accounting sleight of\n hand. Abracadabra!\n\n 35. Finally, the Report concluded, based on a review of financial reports, \u201cwe estimate\n\na value for USBTC that\u2019s as much as 70% less. Typically, such egregious over-payments occur\n\nonly when management is being enriched.\u201d Further:\n\n \u2023We are highly skeptical that the King Mountain JV is worth the $105 mln paid by\n USBTC, given reports that the center at the time lacked both reliable power and\n internet.\n\n Nevertheless, we assign what we believe to be an aggressive $105 mln valuation \u2013\n the price USBTC paid for the facility. This is despite MARA\u2019s recent purchase of\n Granbury and Kearney, which indicates that the King Mountain JV would be worth\n only $64 mln.\n\n \u2023Our valuation of USBTC\u2019s Managed Infrastructure Operations (MIO) business is\n $51 mln, a generous 3x forward revenue.\n\n\n\n 13\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 15 of 26\n\n\n\n\n * * *\n\n In total, we value the USBTC operating assets at the high end at $219 mln. Not\n only do we suspect that USBTC overpaid for the King Mountain JV, but Hut 8\n overpaid again, by a factor of four, for the same facility, along with the Niagara\n mining facility and the two managed-facility contracts. New Hut issued 49.7 mln\n shares in exchange for all US- BTC stock \u2013 a value of about $495 mln at the time.\n Hut 8 also took on $160 mln in net debt plus around $90 mln in planned spending\n commitments ($40 mln for AI equipment and $50 mln in planned capital\n expenditure) in exchange for the USBTC and Legacy Hut assets.\n\n 36. On this news, Hut 8\u2019s stock price fell $2.16, or 23.3%, to close at $7.12 per share\n\non January 18, 2024, on unusually heavy trading volume.\n\n CLASS ACTION ALLEGATIONS\n\n 37. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil\n\nProcedure 23(a) and (b)(3) on behalf of a class, consisting of all persons and entities that purchased\n\nor otherwise acquired Hut 8 securities between November 9, 2023 and January 18, 2024, inclusive,\n\nand who were damaged thereby (the \u201cClass\u201d). Excluded from the Class are Defendants, the\n\nofficers and directors of the Company, at all relevant times, members of their immediate families\n\nand their legal representatives, heirs, successors, or assigns, and any entity in which Defendants\n\nhave or had a controlling interest.\n\n 38. The members of the Class are so numerous that joinder of all members is\n\nimpracticable. Throughout the Class Period, Hut 8\u2019s shares actively traded on the NASDAQ.\n\nWhile the exact number of Class members is unknown to Plaintiff at this time and can only be\n\nascertained through appropriate discovery, Plaintiff believes that there are at least hundreds or\n\nthousands of members in the proposed Class. Millions of Hut 8 shares were traded publicly during\n\nthe Class Period on the NASDAQ. Record owners and other members of the Class may be\n\nidentified from records maintained by Hut 8 or its transfer agent and may be notified of the\n\n\n\n\n 14\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 16 of 26\n\n\n\n\npendency of this action by mail, using the form of notice similar to that customarily used in\n\nsecurities class actions.\n\n 39. Plaintiff\u2019s claims are typical of the claims of the members of the Class as all\n\nmembers of the Class are similarly affected by Defendants\u2019 wrongful conduct in violation of\n\nfederal law that is complained of herein.\n\n 40. Plaintiff will fairly and adequately protect the interests of the members of the Class\n\nand has retained counsel competent and experienced in class and securities litigation.\n\n 41. Common questions of law and fact exist as to all members of the Class and\n\npredominate over any questions solely affecting individual members of the Class. Among the\n\nquestions of law and fact common to the Class are:\n\n a) whether the federal securities laws were violated by Defendants\u2019 acts as\n\n alleged herein;\n\n b) whether statements made by Defendants to the investing public during the\n\n Class Period omitted and/or misrepresented material facts about the\n\n business, operations, and prospects of Hut 8; and\n\n c) to what extent the members of the Class have sustained damages and the\n\n proper measure of damages.\n\n 42. A class action is superior to all other available methods for the fair and efficient\n\nadjudication of this controversy since joinder of all members is impracticable. Furthermore, as the\n\ndamages suffered by individual Class members may be relatively small, the expense and burden\n\nof individual litigation makes it impossible for members of the Class to individually redress the\n\nwrongs done to them. There will be no difficulty in the management of this action as a class action.\n\n\n\n\n 15\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 17 of 26\n\n\n\n\n UNDISCLOSED ADVERSE FACTS\n\n 43. The market for Hut 8\u2019s securities was open, well-developed, and efficient at all\n\nrelevant times. As a result of these materially false and/or misleading statements, and/or failures\n\nto disclose, Hut 8\u2019s securities traded at artificially inflated prices during the Class Period. Plaintiff\n\nand other members of the Class purchased or otherwise acquired Hut 8\u2019s securities relying upon\n\nthe integrity of the market price of the Company\u2019s securities and market information relating to\n\nHut 8, and have been damaged thereby.\n\n 44. During the Class Period, Defendants materially misled the investing public, thereby\n\ninflating the price of Hut 8\u2019s securities, by publicly issuing false and/or misleading statements\n\nand/or omitting to disclose material facts necessary to make Defendants\u2019 statements, as set forth\n\nherein, not false and/or misleading. The statements and omissions were materially false and/or\n\nmisleading because they failed to disclose material adverse information and/or misrepresented the\n\ntruth about Hut 8\u2019s business, operations, and prospects as alleged herein.\n\n 45. At all relevant times, the material misrepresentations and omissions particularized\n\nin this Complaint directly or proximately caused or were a substantial contributing cause of the\n\ndamages sustained by Plaintiff and other members of the Class. As described herein, during the\n\nClass Period, Defendants made or caused to be made a series of materially false and/or misleading\n\nstatements about Hut 8\u2019s financial well-being and prospects. These material misstatements and/or\n\nomissions had the cause and effect of creating in the market an unrealistically positive assessment\n\nof the Company and its financial well-being and prospects, thus causing the Company\u2019s securities\n\nto be overvalued and artificially inflated at all relevant times. Defendants\u2019 materially false and/or\n\nmisleading statements during the Class Period resulted in Plaintiff and other members of the Class\n\npurchasing the Company\u2019s securities at artificially inflated prices, thus causing the damages\n\ncomplained of herein when the truth was revealed.\n\n\n 16\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 18 of 26\n\n\n\n\n LOSS CAUSATION\n\n 46. Defendants\u2019 wrongful conduct, as alleged herein, directly and proximately caused\n\nthe economic loss suffered by Plaintiff and the Class.\n\n 47. During the Class Period, Plaintiff and the Class purchased Hut 8\u2019s securities at\n\nartificially inflated prices and were damaged thereby. The price of the Company\u2019s securities\n\nsignificantly declined when the misrepresentations made to the market, and/or the information\n\nalleged herein to have been concealed from the market, and/or the effects thereof, were revealed,\n\ncausing investors\u2019 losses.\n\n SCIENTER ALLEGATIONS\n\n 48. As alleged herein, Defendants acted with scienter since Defendants knew that the\n\npublic documents and statements issued or disseminated in the name of the Company were\n\nmaterially false and/or misleading; knew that such statements or documents would be issued or\n\ndisseminated to the investing public; and knowingly and substantially participated or acquiesced\n\nin the issuance or dissemination of such statements or documents as primary violations of the\n\nfederal securities laws. As set forth elsewhere herein in detail, the Individual Defendants, by virtue\n\nof their receipt of information reflecting the true facts regarding Hut 8, their control over, and/or\n\nreceipt and/or modification of Hut 8\u2019s allegedly materially misleading misstatements and/or their\n\nassociations with the Company which made them privy to confidential proprietary information\n\nconcerning Hut 8, participated in the fraudulent scheme alleged herein.\n\n APPLICABILITY OF PRESUMPTION OF RELIANCE\n\n (FRAUD-ON-THE-MARKET DOCTRINE)\n\n 49. The market for Hut 8\u2019s securities was open, well-developed, and efficient at all\n\nrelevant times. As a result of the materially false and/or misleading statements and/or failures to\n\ndisclose, Hut 8\u2019s securities traded at artificially inflated prices during the Class Period. Plaintiff\n\n\n 17\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 19 of 26\n\n\n\n\nand other members of the Class purchased or otherwise acquired the Company\u2019s securities relying\n\nupon the integrity of the market price of Hut 8\u2019s securities and market information relating to Hut\n\n8, and have been damaged thereby.\n\n 50. During the Class Period, the artificial inflation of Hut 8\u2019s shares was caused by the\n\nmaterial misrepresentations and/or omissions particularized in this Complaint causing the damages\n\nsustained by Plaintiff and other members of the Class. As described herein, during the Class\n\nPeriod, Defendants made or caused to be made a series of materially false and/or misleading\n\nstatements about Hut 8\u2019s business, prospects, and operations. These material misstatements and/or\n\nomissions created an unrealistically positive assessment of Hut 8 and its business, operations, and\n\nprospects, thus causing the price of the Company\u2019s securities to be artificially inflated at all\n\nrelevant times, and when disclosed, negatively affected the value of the Company shares.\n\nDefendants\u2019 materially false and/or misleading statements during the Class Period resulted in\n\nPlaintiff and other members of the Class purchasing the Company\u2019s securities at such artificially\n\ninflated prices, and each of them has been damaged as a result.\n\n 51. At all relevant times, the market for Hut 8\u2019s securities was an efficient market for\n\nthe following reasons, among others:\n\n a) Hut 8 shares met the requirements for listing, and was listed and actively\n\n traded on the NASDAQ, a highly efficient and automated market;\n\n b) As a regulated issuer, Hut 8 filed periodic public reports with the SEC\n\n and/or the NASDAQ;\n\n c) Hut 8 regularly communicated with public investors via established market\n\n communication mechanisms, including through regular dissemination of\n\n press releases on the national circuits of major newswire services and\n\n\n\n\n 18\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 20 of 26\n\n\n\n\n through other wide-ranging public disclosures, such as communications\n\n with the financial press and other similar reporting services; and/or\n\n d) Hut 8 was followed by securities analysts employed by brokerage firms who\n\n wrote reports about the Company, and these reports were distributed to the\n\n sales force and certain customers of their respective brokerage firms. Each\n\n of these reports was publicly available and entered the public marketplace.\n\n 52. As a result of the foregoing, the market for Hut 8\u2019s securities promptly digested\n\ncurrent information regarding Hut 8 from all publicly available sources and reflected such\n\ninformation in Hut 8\u2019s share price. Under these circumstances, all purchasers of Hut 8\u2019s securities\n\nduring the Class Period suffered similar injury through their purchase of Hut 8\u2019s securities at\n\nartificially inflated prices and a presumption of reliance applies.\n\n 53. A Class-wide presumption of reliance is also appropriate in this action under the\n\nSupreme Court\u2019s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972),\n\nbecause the Class\u2019s claims are, in large part, grounded on Defendants\u2019 material misstatements\n\nand/or omissions. Because this action involves Defendants\u2019 failure to disclose material adverse\n\ninformation regarding the Company\u2019s business operations and financial prospects\u2014information\n\nthat Defendants were obligated to disclose\u2014positive proof of reliance is not a prerequisite to\n\nrecovery. All that is necessary is that the facts withheld be material in the sense that a reasonable\n\ninvestor might have considered them important in making investment decisions. Given the\n\nimportance of the Class Period material misstatements and omissions set forth above, that\n\nrequirement is satisfied here.\n\n NO SAFE HARBOR\n\n 54. The statutory safe harbor provided for forward-looking statements under certain\n\ncircumstances does not apply to any of the allegedly false statements pleaded in this Complaint.\n\n\n 19\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 21 of 26\n\n\n\n\nThe statements alleged to be false and misleading herein all relate to then-existing facts and\n\nconditions. In addition, to the extent certain of the statements alleged to be false may be\n\ncharacterized as forward looking, they were not identified as \u201cforward-looking statements\u201d when\n\nmade and there were no meaningful cautionary statements identifying important factors that could\n\ncause actual results to differ materially from those in the purportedly forward-looking statements.\n\nIn the alternative, to the extent that the statutory safe harbor is determined to apply to any forward-\n\nlooking statements pleaded herein, Defendants are liable for those false forward-looking\n\nstatements because at the time each of those forward-looking statements was made, the speaker\n\nhad actual knowledge that the forward-looking statement was materially false or misleading,\n\nand/or the forward-looking statement was authorized or approved by an executive officer of Hut\n\n8 who knew that the statement was false when made.\n\n FIRST CLAIM\n\n Violation of Section 10(b) of The Exchange Act and\n\n Rule 10b-5 Promulgated Thereunder\n\n Against All Defendants\n\n 55. Plaintiff repeats and re-alleges each and every allegation contained above as if fully\n\nset forth herein.\n\n 56. During the Class Period, Defendants carried out a plan, scheme and course of\n\nconduct which was intended to and, throughout the Class Period, did: (i) deceive the investing\n\npublic, including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and\n\nother members of the Class to purchase Hut 8\u2019s securities at artificially inflated prices. In\n\nfurtherance of this unlawful scheme, plan and course of conduct, Defendants, and each defendant,\n\ntook the actions set forth herein.\n\n\n\n\n 20\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 22 of 26\n\n\n\n\n 57. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made\n\nuntrue statements of material fact and/or omitted to state material facts necessary to make the\n\nstatements not misleading; and (iii) engaged in acts, practices, and a course of business which\n\noperated as a fraud and deceit upon the purchasers of the Company\u2019s securities in an effort to\n\nmaintain artificially high market prices for Hut 8\u2019s securities in violation of Section 10(b) of the\n\nExchange Act and Rule 10b-5. All Defendants are sued either as primary participants in the\n\nwrongful and illegal conduct charged herein or as controlling persons as alleged below.\n\n 58. Defendants, individually and in concert, directly and indirectly, by the use, means\n\nor instrumentalities of interstate commerce and/or of the mails, engaged and participated in a\n\ncontinuous course of conduct to conceal adverse material information about Hut 8\u2019s financial well-\n\nbeing and prospects, as specified herein.\n\n 59. Defendants employed devices, schemes and artifices to defraud, while in\n\npossession of material adverse non-public information and engaged in acts, practices, and a course\n\nof conduct as alleged herein in an effort to assure investors of Hut 8\u2019s value and performance and\n\ncontinued substantial growth, which included the making of, or the participation in the making of,\n\nuntrue statements of material facts and/or omitting to state material facts necessary in order to\n\nmake the statements made about Hut 8 and its business operations and future prospects in light of\n\nthe circumstances under which they were made, not misleading, as set forth more particularly\n\nherein, and engaged in transactions, practices and a course of business which operated as a fraud\n\nand deceit upon the purchasers of the Company\u2019s securities during the Class Period.\n\n 60. Each of the Individual Defendants\u2019 primary liability and controlling person liability\n\narises from the following facts: (i) the Individual Defendants were high-level executives and/or\n\ndirectors at the Company during the Class Period and members of the Company\u2019s management\n\n\n\n\n 21\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 23 of 26\n\n\n\n\nteam or had control thereof; (ii) each of these defendants, by virtue of their responsibilities and\n\nactivities as a senior officer and/or director of the Company, was privy to and participated in the\n\ncreation, development and reporting of the Company\u2019s internal budgets, plans, projections and/or\n\nreports; (iii) each of these defendants enjoyed significant personal contact and familiarity with the\n\nother defendants and was advised of, and had access to, other members of the Company\u2019s\n\nmanagement team, internal reports and other data and information about the Company\u2019s finances,\n\noperations, and sales at all relevant times; and (iv) each of these defendants was aware of the\n\nCompany\u2019s dissemination of information to the investing public which they knew and/or\n\nrecklessly disregarded was materially false and misleading.\n\n 61. Defendants had actual knowledge of the misrepresentations and/or omissions of\n\nmaterial facts set forth herein, or acted with reckless disregard for the truth in that they failed to\n\nascertain and to disclose such facts, even though such facts were available to them. Such\n\ndefendants\u2019 material misrepresentations and/or omissions were done knowingly or recklessly and\n\nfor the purpose and effect of concealing Hut 8\u2019s financial well-being and prospects from the\n\ninvesting public and supporting the artificially inflated price of its securities. As demonstrated by\n\nDefendants\u2019 overstatements and/or misstatements of the Company\u2019s business, operations,\n\nfinancial well-being, and prospects throughout the Class Period, Defendants, if they did not have\n\nactual knowledge of the misrepresentations and/or omissions alleged, were reckless in failing to\n\nobtain such knowledge by deliberately refraining from taking those steps necessary to discover\n\nwhether those statements were false or misleading.\n\n 62. As a result of the dissemination of the materially false and/or misleading\n\ninformation and/or failure to disclose material facts, as set forth above, the market price of Hut 8\u2019s\n\nsecurities was artificially inflated during the Class Period. In ignorance of the fact that market\n\n\n\n\n 22\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 24 of 26\n\n\n\n\nprices of the Company\u2019s securities were artificially inflated, and relying directly or indirectly on\n\nthe false and misleading statements made by Defendants, or upon the integrity of the market in\n\nwhich the securities trades, and/or in the absence of material adverse information that was known\n\nto or recklessly disregarded by Defendants, but not disclosed in public statements by Defendants\n\nduring the Class Period, Plaintiff and the other members of the Class acquired Hut 8\u2019s securities\n\nduring the Class Period at artificially high prices and were damaged thereby.\n\n 63. At the time of said misrepresentations and/or omissions, Plaintiff and other\n\nmembers of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff\n\nand the other members of the Class and the marketplace known the truth regarding the problems\n\nthat Hut 8 was experiencing, which were not disclosed by Defendants, Plaintiff and other members\n\nof the Class would not have purchased or otherwise acquired their Hut 8 securities, or, if they had\n\nacquired such securities during the Class Period, they would not have done so at the artificially\n\ninflated prices which they paid.\n\n 64. By virtue of the foregoing, Defendants violated Section 10(b) of the Exchange Act\n\nand Rule 10b-5 promulgated thereunder.\n\n 65. As a direct and proximate result of Defendants\u2019 wrongful conduct, Plaintiff and the\n\nother members of the Class suffered damages in connection with their respective purchases and\n\nsales of the Company\u2019s securities during the Class Period.\n\n SECOND CLAIM\n\n Violation of Section 20(a) of The Exchange Act\n\n Against the Individual Defendants\n\n 66. Plaintiff repeats and re-alleges each and every allegation contained above as if fully\n\nset forth herein.\n\n\n\n\n 23\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 25 of 26\n\n\n\n\n 67. Individual Defendants acted as controlling persons of Hut 8 within the meaning of\n\nSection 20(a) of the Exchange Act as alleged herein. By virtue of their high-level positions and\n\ntheir ownership and contractual rights, participation in, and/or awareness of the Company\u2019s\n\noperations and intimate knowledge of the false financial statements filed by the Company with the\n\nSEC and disseminated to the investing public, Individual Defendants had the power to influence\n\nand control and did influence and control, directly or indirectly, the decision-making of the\n\nCompany, including the content and dissemination of the various statements which Plaintiff\n\ncontends are false and misleading. Individual Defendants were provided with or had unlimited\n\naccess to copies of the Company\u2019s reports, press releases, public filings, and other statements\n\nalleged by Plaintiff to be misleading prior to and/or shortly after these statements were issued and\n\nhad the ability to prevent the issuance of the statements or cause the statements to be corrected.\n\n 68. In particular, Individual Defendants had direct and supervisory involvement in the\n\nday-to-day operations of the Company and, therefore, had the power to control or influence the\n\nparticular transactions giving rise to the securities violations as alleged herein, and exercised the\n\nsame.\n\n 69. As set forth above, Hut 8 and Individual Defendants each violated Section 10(b)\n\nand Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of their position\n\nas controlling persons, Individual Defendants are liable pursuant to Section 20(a) of the Exchange\n\nAct. As a direct and proximate result of Defendants\u2019 wrongful conduct, Plaintiff and other\n\nmembers of the Class suffered damages in connection with their purchases of the Company\u2019s\n\nsecurities during the Class Period.\n\n PRAYER FOR RELIEF\n\n WHEREFORE, Plaintiff prays for relief and judgment, as follows:\n\n\n\n\n 24\n\f Case 1:24-cv-01636-VM Document 1 Filed 03/04/24 Page 26 of 26\n\n\n\n\n A. Determining that this action is a proper class action under Rule 23 of the Federal\n\nRules of Civil Procedure;\n\n B. Awarding compensatory damages in favor of Plaintiff and the other Class members\n\nagainst all defendants, jointly and severally, for all damages sustained as a result of Defendants\u2019\n\nwrongdoing, in an amount to be proven at trial, including interest thereon;\n\n C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in\n\nthis action, including counsel fees and expert fees; and\n\n D. Such other and further relief as the Court may deem just and proper.\n\n JURY TRIAL DEMANDED\n\n Plaintiff hereby demands a trial by jury.\n\n Dated: March 4, 2024 POMERANTZ LLP\n\n /s/ J. Alexander Hood II\n J. Alexander Hood II\n Jeremy A. Lieberman\n Thomas H. Przybylowski\n 600 Third Avenue, 20th Floor\n New York, New York 10016\n Telephone: (212) 661-1100\n Facsimile: (917) 463-1044\n ahood@pomlaw.com\n jalieberman@pomlaw.com\n tprzybylowski@pomlaw.com\n\n Attorneys for Plaintiff\n\n\n\n\n 25\n\f","ocr_status":2,"date_upload":"2025-12-25T05:41:45.099001-08:00","document_number":"1","attachment_number":null,"pacer_doc_id":"127035036448","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Complaint","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/459255801/","id":459255801,"tags":[],"absolute_url":"/docket/68307680/1/1/latino-v-hut-8-corp/","date_created":"2025-11-18T16:07:03.076872-08:00","date_modified":"2025-11-18T16:07:03.076881-08:00","sha1":"","page_count":2,"file_size":551487,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"1","attachment_number":1,"pacer_doc_id":"127035036449","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit Certification","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/459255802/","id":459255802,"tags":[],"absolute_url":"/docket/68307680/1/2/latino-v-hut-8-corp/","date_created":"2025-11-18T16:07:03.114085-08:00","date_modified":"2025-11-18T16:07:03.114101-08:00","sha1":"","page_count":2,"file_size":66579,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"1","attachment_number":2,"pacer_doc_id":"127035036450","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit Schedule A","acms_document_guid":""}],"date_created":"2024-03-04T13:10:31.742167-08:00","date_modified":"2024-03-04T13:10:31.747921-08:00","date_filed":"2024-03-04","time_filed":"15:57:47","entry_number":1,"recap_sequence_number":"2024-03-04.001","pacer_sequence_number":5,"description":"","tags":[]}],"entries_total":"https://www.courtlistener.com/api/rest/v4/docket-entries/?count=on&docket=68307680&page_size=40"}