Aliko v. Tai — Entry #34: AMENDED COMPLAINT Verified Consolidated Shareholder Derivative (Redacted) against Joseph Flinn, Asher Genoot, Alexia Hefti, Mike Ho, Hut 8 Corp., Jamie…
Case: Aliko v. Tai flsd · 1:24-cv-20890
filed March 06, 2024
What this document is
Docket entry #34 · filed May 14, 2026
AMENDED COMPLAINT Verified Consolidated Shareholder Derivative (Redacted) against Joseph Flinn, Asher Genoot, Alexia Hefti, Mike Ho, Hut 8 Corp., Jamie Leverton, Stanley O'Neal, Rick Rickertsen, Mayo A. Shattuck, III, Bill Tai, Shenif Visram, Amy Wilkinson, filed by Alexander Jiang, Matthew Medney, Wesley Aliko. (Attachments: # 1 Certification Verification of Matthew Medney, # 2 Certification Verification of Wesley Aliko, # 3 Certification Verification of Alexander Jiang)(Eggnatz, Joshua) (Entered: 05/14/2026)
Who is involved
- Hut 8 Corp. [tracked: Hut 8]
- Alexander Jiang
- Alexia Hefti
- Amy Wilkinson
- Asher Genoot
- Bill Tai
- Jamie Leverton
- Joseph Flinn
- Matthew Medney
- Mayo A. Shattuck, III
- Mike Ho
- Rick Rickertsen
- Shenif Visram
- Stanley O'Neal
- Wesley Aliko
Why we have it
We follow this case because a company we track is a party: Hut 8 (listed as “Hut 8 Corp.”). We checked the full party list on September 12, 2026 and confirmed the match.
We bought this filing from PACER (the federal courts’ paid records system) for $3.00 on September 27, 2026; the purchase also placed it in the free RECAP archive for everyone.
Document text
53 page(s), 112,182 characters, converted from the PDF's text layer · plain text.
Full text
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 1 of 53
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
WESLEY ALIKO, Derivatively on Behalf of
HUT 8 CORP., Case No: 1:24-cv-20890-DSL
Plaintiff,
VERIFIED CONSOLIDATED
v. SHAREHOLDER DERIVATIVE
COMPLAINT [REDACTED]
BILL TAI, MIKE HO, ASHER GENOOT,
ALEXIA HEFTI, JOSEPH FLINN, MAYO A.
SHATTUCK, III, STANLEY O’NEAL, AMY
WILKINSON, RICK RICKERTSEN, JAMIE
LEVERTON, and SHENIF VISRAM,
Defendants, JURY TRIAL DEMANDED
and,
HUT 8 CORP.,
Nominal Defendant.
Plaintiffs Wesley Aliko (“Aliko”), Matthew Medney (“Medney”), and Alexander Jiang
(“Jiang,” and collectively, “Plaintiffs”), by and through their undersigned counsel, derivatively on
behalf of Hut 8 Corp. (“Hut 8” or the “Company”), submit this Verified Consolidated Shareholder
Derivative Complaint (the “Complaint”). Plaintiffs’ allegations are based upon their personal
knowledge as to themselves and their own acts, and upon information and belief, developed from
the investigation and analysis by Plaintiffs’ counsel, including a review of internal books and
records produced to Plaintiffs, as well as publicly available information, including filings by the
Company with the U.S. Securities and Exchange Commission (“SEC”), press releases, news
reports, analyst reports, investor conference transcripts, publicly available filings in lawsuits, and
matters of public record.
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 2 of 53
NATURE OF THE ACTION
1. This is a shareholder derivative action brought in the right, and for the benefit, of
the Company against certain of its officers and directors seeking to remedy the Individual
Defendants’ (defined below) violations of state and federal law that have caused substantial harm
to the Company.
2. Hut 8 is a crypto currency and data mining company. The Company is engaged in
Bitcoin mining and hosting, managed services, energy arbitrage, and operating traditional data
centers. The Company operates computing infrastructure which mines Bitcoin and delivers
computing services to enterprise customers.
3. Hut 8 was formed following the November 2023 merger of Hut 8 Mining Corp.
(“Legacy Hut”) and U.S. Data Mining Group, Inc. d/b/a US Bitcoin Corp. (“USBTC”) (the
“Merger”). USBTC held a 50% interest in a joint venture bitcoin mining facility, located in King
Mountain, Texas (the “King Mountain JV”), which was acquired in the Merger.
4. In connection with the Merger, despite touting the energy potential the Merger
would provide Hut 8, the Individual Defendants principally failed to disclose the energy issues
with the King Mountain JV – one of USBTC’s digital asset mining sites. The Individual
Defendants also failed to disclose that the risks associated with the loss of internet connectivity
had already materialized at the King Mountain JV, rendering their disclosure of that risk
inadequate and misleading.
5. On January 18, 2024, at approximately 10:30 AM EST, J Capital Research
published a report that alleged, inter alia, that that Legacy Hut’s merger with USBTC was
premised on a number of misstatements, including that USBTC’s King Mountain JV “has
historically failed to provide energy and high-speed internet.”
2
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 3 of 53
6. On this news, the Company’s stock price fell $2.16, or 23.3%, to close at $7.12 per
share on January 18, 2024, on unusually heavy trading volume.
7. As a result of the wrongful acts and omissions, and the precipitous decline in the
market value of the Company’s securities, the Company has suffered significant losses and
damages.
JURISDICTION
8. This Court has subject-matter jurisdiction over this action pursuant to 28 U.S.C. §
1331 as Plaintiffs’ claims raise a federal question under Section 21D of the Securities Exchange
Act of 1934 (the “Exchange Act”) (15 U.S.C. § 78u-4(f)) and under Section 11(f) of the Securities
Act of 1933 (“Securities Act”) (15 U.S.C. § 77k(f)(1)). This Court has supplemental jurisdiction
over the state law claims asserted herein pursuant to 28 U.S.C. §1367(a). This action is not a
collusive one to confer jurisdiction on a court of the United States which it would not otherwise
have
9. This Court has personal jurisdiction over each defendant named herein because
each defendant is either a corporation that conducts business in and maintains operations in this
District or is an individual who has sufficient minimum contacts with this District to render the
exercise of jurisdiction by the courts of this District permissible under traditional notions of fair
play and substantial justice.
10. Venue is proper in this Court because: (a) the Company maintains its principal place
of business in this District; (b) one or more of the defendants either resides in or maintains
executive offices in this District; (c) a substantial portion of the transactions and wrongs
complained of herein, including Defendants’ primary participation in the wrongful acts detailed
herein, and aiding and abetting and conspiracy in violation of fiduciary duties owed to the
3
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 4 of 53
Company, occurred in this District; and (d) Defendants have received substantial compensation in
this District by doing business here and engaging in numerous activities that had an effect in this
District.
THE PARTIES
Plaintiffs
11. Plaintiff Wesley Aliko is, and was at all relevant times, a shareholder of the
Company. Plaintiff Aliko will fairly and adequately represent the interests of the shareholders in
enforcing the rights of the corporation.
12. Plaintiff Matthew Medney is, and was at all relevant times, a shareholder of the
Company. Plaintiff Medney will fairly and adequately represent the interests of the shareholders
in enforcing the rights of the corporation
13. Plaintiff Alexander Jiang is, and was at all relevant times, a shareholder of the
Company. Plaintiff Jiang will fairly and adequately represent the interests of the shareholders in
enforcing the rights of the corporation.
Nominal Defendant
14. Nominal Defendant Hut 8 is incorporated under the laws of Delaware, with its
principal executive offices located in Miami, Florida.
Director Defendants
15. Defendant Bill Tai (“Tai”) serves as Chairman of the Board of Directors (the
“Board”) and has served as a member of the Board at all relevant times. Prior to the Merger,
Defendant Tai was a director at Legacy Hut beginning in March 2018 through the Merger.
Defendant Tai serves as a member of the Board’s Nominating, Environmental, Social and
Governance Committee.
4
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 5 of 53
16. Defendant Mike Ho (“Ho”) has served as a member of the Board and as the
Company’s Chief Strategy Officer (“CSO”) at all relevant times. Prior to joining Hut 8, Defendant
Ho co-founded and served as Chief Executive Officer (“CEO”) and chair of the board of USBTC.
17. Defendant Asher Genoot (“Genoot”) has served as the Company’s President and
as a member of the Board at all relevant times. On February 6, 2024, the Company appointed
Genoot as CEO. Defendant Genoot is a co-founder of USBTC and, from 2020 to 2023, served as
USBTC’s President and as a director.
18. Defendant Joseph Flinn (“Flinn”) has served as a member of the Board at all
relevant times. Prior to the Merger, Defendant Flinn was a director at Legacy Hut beginning in
August 2018 through the Merger. Defendant Flinn serves as Chair of the Board’s Audit
Committee.
19. Defendant Mayo A. Shattuck, III (“Shattuck”) has served as a member of the
Board at all relevant times. Prior to joining Hut 8, Shattuck served in a leadership role with USBTC
for “Web 3.0.” He also was a director of USBTC between December 2021 through the Merger.
Defendant Shattuck serves as Chair of the Board’s Compensation and Talent Development
Committee.
20. Defendant Stanley O’Neal (“O’Neal”) has served as a member of the Board at all
relevant times. Prior to joining Hut 8, O’Neal served as a director of USBTC from March 2021
through the Merger. Defendant O’Neal serves as a member of the Board’s Audit Committee.
21. Defendant Amy Wilkinson (“Wilkinson”) has served as a member of the Board at
all relevant times. Prior to joining Hut 8, Wilkinson served as a director of USBTC from August
2022 through the Merger. Defendant Wilkinson serves as Chair of the Board’s Nominating,
5
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 6 of 53
Environmental, Social and Governance Committee and as a member of the Compensation and
Talent Development Committee.
22. Defendant Rick Rickertsen (“Rickertsen”) has served as a member of the Board at
all relevant times. Prior to the Merger, Defendant Rickertsen was a director at Legacy Hut
beginning in December 2021 through the Merger. Defendant Rickertsen serves as a member of
the Board’s Compensation and Talent Development Committee.
23. Defendant Alexia Hefti (“Hefti”) served as a member of the Board at all relevant
times through until the 2024 Annual General Meeting held on June 21, 2024. Prior to the Merger,
Defendant Hefti was a director at Legacy Hut beginning in May 2021 through the Merger.
Defendant also served as a member of the Board’s Nominating, Environmental, Social and
Governance Committee.
24. Defendants Tai, Ho, Genoot, Flinn, Shattuck, O’Neal, Wilkinson, Rickertsen, and
Hefti are herein referred to as the “Director Defendants”.
Officer Defendants
25. Defendant Jamie Leverton (“Leverton”) served as CEO of the Company until
February 6, 2024, when the Company notified her of her termination, without cause. Defendant
Leverton served as a member of the Board until her departure effective February 12, 2024.
Defendant Leverton was the CEO at Legacy Hut. Defendant Leverton sold 134,485 shares of
Company common stock on inside information, for which she received approximately $1.8 million
in total proceeds.
26. Defendant Shenif Visram (“Visram”) has served as the Company’s Chief Financial
Officer (“CFO”) at all relevant times through to August 2024. Defendant Visram was the CFO of
6
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 7 of 53
Legacy Hut prior to the Merger. Defendant Visram sold 17,897 shares of Company common stock
on inside information, for which he received approximately $253,067 in total proceeds.
27. Defendants Leverton and Visram are sometimes referred to herein collectively as
the “Officer Defendants”.
28. The Director Defendants and the Officer Defendants are sometimes referred to
herein collectively as the “Individual Defendants”.
SUBSTANTIVE ALLEGATIONS
Background of the Bitcoin Industry
29. Bitcoin is a decentralized, peer-to-peer virtual currency that exists solely in
electronic form and is the most utilized digital asset in the retail and commercial marketplace.
Bitcoin is used like money and can be exchanged for traditional currencies or used to purchase
goods and services, typically online.
30. Crypto assets, such as Bitcoin, are held within public blockchain addresses, which
are alphanumeric references where assets can be sent or stored. Each public address is controlled
through a corresponding private key and public key that are cryptographically generated. The
private key allows the recipient to access any funds belonging to the address and the public key
validates the transactions that are broadcasted to and from the address.
31. The Bitcoin blockchain is a decentralized, peer-to-peer network of data made up of
a chain of “blocks” that contain information about each Bitcoin transaction. Blocks are strung
together in chronological order, creating a digital chain of blocks, and once a block is added to the
blockchain, anyone can view it. However, before a block is added to the Bitcoin blockchain, it first
must be verified through a process called mining.
7
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 8 of 53
32. Mining is the process by which specialized computer equipment solves complex
math problems to verify and secure transactions and create new blocks in the Bitcoin blockchain.
Mining hardware provides computing power, which is measured in “hashrate” or “hashes per
second.” A “hash” is a single computation run by a miner to attempt to create a new block in the
Bitcoin blockchain. The more hashes per second a miner provides, the greater probability of the
miner creating a new block. Successfully adding a block to the blockchain results in a reward of
Bitcoin.
33. Most Bitcoin mining is conducted by mining pools, which coordinate groups of
miners that work together to have a better chance of being rewarded Bitcoin. Mining pools share
the payouts among participants.
34. The process of mining requires significant computing power, and therefore, vast
amounts of electricity.
Legacy Hut and USBTC
35. Founded in 2017, Legacy Hut was a Canada-based company that went public in
2018. At the time of the Merger, Legacy Hut had two digital asset mining sites in Alberta, Canada,
five high performance computing data centers in British Columbia and Ontario, Canada, and one
authorized repair center in Alberta, Canada, that was certified by MicroBT, a Bitcoin mining
machine manufacturer.
36. Legacy Hut was the first Canadian digital asset miner to list on NASDAQ and it
had one of the highest inventories of self-mined Bitcoin of any publicly traded company.
37. Prior to the Merger, Legacy “Hut 8 [was] experiencing challenges at its existing
mining sites in Alberta and Ontario. The Drumheller and Medicine Hat sites are operating at energy
8
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 9 of 53
prices that are above historical averages (eroding mining margins) while the North Bay site is
currently idle as a result of a legal despite…” HUT8_00003630.
38. USBTC was a privately held Nevada corporation with a principal place of business
in Miami, Florida. USBTC was an industrial-scale operator of Bitcoin mining sites, and its strategy
was to design, build, and operate sites with access to low-cost and sustainable sources of electricity.
As of September 30, 2023, USBTC operated a total of approximately 182,000 miners (including
30,200 owned miners) across four locations, with access to roughly 730 megawatts (“MW”) of
electricity, via USBTC’s mining, hosting, equipment sales, and managed infrastructure operations.
39. At the time of the Merger, USBTC had four digital asset mining sites. It fully owned
a site in Niagara Falls, New York, referred to as the “Alpha Site,” that had access to approximately
50 MW of electricity. Pursuant to a joint venture agreement, it held a held a 50% interest in a site
in King Mountain Texas, the King Mountain JV also referred to as the “Echo Site,” that had access
to approximately 280 MW of electricity. USBTC also managed, under property management
agreements, sites in Kearney, Nebraska and Granbury, Texas, referred to, respectively, as the
“Charlie Site” and the “Delta Site.” The Kearney and Granbury sites had access to approximately
100 MW and 300 MW of electricity, respectively.
40. USBTC acquired its 50% interest in the King Mountain JV through a competitive
auction process in connection with the Chapter 11 bankruptcy filing of Compute North Member
LLC (“Compute North”). It acquired Compute North’s 50% interest in TZRC LLC (“TZRC”), an
early-stage operator of vertically integrated cryptocurrency mining and power facilities and
assumed a property management agreement with TZRC and a senior secured promissory note
related to the King Mountain JV. NextEra Energy, Inc. held the other 50% interest in TZRC.
9
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 10 of 53
41. USBTC’s revenue streams included self-mining, hosting third-party machines at its
sites for a fee, managed infrastructure, and equipment sales.
42. The only cryptocurrency that USBTC has mined is Bitcoin. UBSTC’s goal was to
increase the hashrate it operated and to deploy, host, and operate miners with profitable hashrate-
to-power cost profiles.
43. Hosting services include the provision of mining equipment, energized spaces, and
typically also monitoring, active troubleshooting, and various maintenance levels for the mining
equipment.
44. Managed infrastructure services include providing day-to-day management,
support, and administrative functions of operating Bitcoin mining datacenters owned or leased by
third-party or related party customers, in exchange for management fees and reimbursement of
certain operating costs.
The Merger
45. In December 2022, Stifel GMP (“Stifel”) prepared a presentation to the Director
Defendants. At this time, Stifel “acted as Hut’s trusted advisor in sourcing and evaluating various
combinations.” HUT8_00003018. In its presentation, Stifel communicated to the Director
Defendants that it “believe[d] that a combination with US Bitcoin Corporation (“USBTC”) is a
unique fit and most beneficial to Hut’s existing and future operations.” Id.
46. At this same time, Stifel acknowledged that Legacy Hut’s operations were not fully
performing, noting that “Operations have been suspended” at the North Bay, Ontario site; that
Legacy Hut’s Drumheller site was “[s]truggling with profitability”; and that “volatility [was]
expected to continue” for Legacy Hut. HUT8_00003023. Thus, a business combination was vital
10
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 11 of 53
for Legacy Hut to “maximize value for shareholders and mitigate current operating hurdles.”
HUT8_00003018.
47. Stifel informed the Director Defendants that “Project Union” (i.e., the combination
with USBTC) “provides Hut shareholders with meaningful value on a variety of metrics,” as
follows:
HUT8_00003040
48. On February 7, 2023, Legacy Hut and USBTC announced in a press release that
their boards had unanimously approved a business combination agreement (the “Business
11
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 12 of 53
Combination Agreement”), pursuant to which the companies would combine in an all-stock
merger of equals and become wholly owned subsidiaries of Hut 8.
49. Under the Business Combination Agreement, Legacy Hut shareholders would
receive 0.2 shares of Hut 8 stock for each Legacy Hut share and USBTC shareholders would
receive 0.6716 shares of Hut 8 stock for each share of USBTC capital stock, resulting in Legacy
Hut and USBTC shareholders each effectively owning approximately fifty percent of Hut 8 stock.
50. Legacy Hut agreed to provide USBTC with secured bridge financing in the amount
of $6-6.5 million in the interim period.
51. Following the Merger, the board of directors of Hut 8 would consist of 5 directors
from Legacy Hut and 5 directors from USBTC, including Bill Tai (Legacy Hut) as the Chair of
Hut 8’s Board.
52. The senior management team would also include former management of Legacy
Hut and USBTC, including Jaime Leverton (Legacy Hut) as CEO, Asher Genoot (USBTC) as
President, Michael Ho (USBTC) as CSO, and Shenif Visram (Legacy Hut) as CFO.
53. On February 13, 2023, Hut 8 filed the initial registration statement on Form S-4
with the SEC announcing the proposed merger between Legacy Hut and USBTC. Genoot and Ho
signed the Form S-4.
54. Defendants Ho, Tai, O’Neal, Shattuck, Wilkinson, Leverton, Rickertsen, Hefti, and
Flinn submitted their written consent to being named in the registration statement as prospective
directors of post-Merger Hut 8, that are attached as exhibits to the registration statement.
55. Hut 8 filed seven amendments to the registration statement on Forms S-4/A on or
around April 18, 2023, June 13, 2023, July 17, 2023, August 24, 2023, September 18, 2023,
November 6, 2023, and November 8, 2023. Genoot and Ho signed each amendment to the initial
12
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 13 of 53
registration statement. Each of the amendments also incorporated the previously filed exhibits
consisting of the written consents of Ho, Tai, O’Neal, Shattuck, Wilkinson, Leverton, Rickertsen,
Hefti, and Flinn to be named as directors of post-Merger Hut 8.
56. The SEC declared the registration statement, as amended, effective on November
9, 2023. On that same day, the Company filed a final prospectus on Form 424(b)(3) (the
“Prospectus”), that incorporates the registration statement. The Prospectus and the registration
statement, as amended, are collectively referred to as the “Registration Statement.”
57. On November 29, 2023, the Company filed three registration statements on Form
S-8 (the “Forms S-8”), which registered shares related to employee benefit plans pursuant to and
subject to the terms of the Business Combination Agreement. Genoot, and Ho signed each of the
Forms S-8 and each of the Forms S-8 incorporated the Prospectus by reference.
58. On November 30, 2023, the Merger between Legacy Hut and USBTC closed.
The False and Misleading Registration Statement
59. As detailed further below, the Individual Defendants drummed up investor support
for the proposed Merger–including in a February 7, 2023 investor presentation–by claiming that
USBTC would improve the Company’s “energy strategy and commitment to leveraging low-cost
renewable energy sources,” including with “[a] diversified mix of hydro, wind, and nuclear energy
sources powering the expanded site portfolio.” In a press release announcing the Merger, the King
Mountain JV was touted as in an important asset and that the “USBTC team will bring significant
leadership in energy orientation, development, demand response, hedging, grid character attacks.”
60. The Individual Defendants caused Hut 8 to issue the misleading Registration
Statement, while failing to disclose the energy and internet deficiencies at the King Mountain JV
13
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 14 of 53
prior to the Merger. The Registration Statement contained only generic risk statements about
USBTC’s energy supply and that it may face internet disruptions. Yet, the reality was far different.
61. Critically, the Registration Statement failed to disclose that King Mountain JV was
already experiencing energy issues and internet outages. Yet, the Individual Defendants were
aware of, or should have been aware of, the operational deficiencies of the King Mountain JV, as
reflected by the Opinion and Order denying, in part, defendants motion to dismiss in the factually
related securities class action, captioned In re Hut 8 Corp. Sec. Litig., No. 1:24-cv-00904-VM
(S.D.N.Y.) (the “Securities Class Action”). Pertinently, the Opinion and Order found that “the
King Mountain JV experienced energy and internet problems that were knowable before the
Merger.” Securities Class Action, ECF No. 57, at 60.
62. The court in the Securities Class Action also found the risks included in the
Registration Statement were “misleading because they omitted energy and internet problems that
materialized.” Id. at 65.
63. As explained below, however, these facts were concealed from investors until the
publication of the J Capital Research Report on January 18, 2024.
The Individual Defendants Failed to Conduct Adequate Due Diligence
64. As explained herein, as officers and directors of the Company, the Individual
Defendants owed Hut 8 certain fiduciary duties including those of loyalty, good faith, and due
care. To satisfy their duty of care, the Individual Defendants were required to make a good faith
effort to oversee the Company’s operations by implementing an oversight system and then
monitoring it.
14
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 15 of 53
65. However, the Individual Defendants breached their duty of care to Hut 8 by failing
to exercise reasonable and prudent supervision over management, controls, and operations.
Specifically, they failed to conduct adequate due diligence of USBTC.
66. Prior to the Merger, Hut 8’s Board engaged Kroll, LLC, operating through its Duff
& Phelps Opinion Practice (“Kroll”), to serve as an independent financial advisor to the Board to
provide an opinion on “the fairness, from a financial view, to the Company of the USBTC
Exchange Ratio.” HUT8_00002666.
67. Kroll prepared the Project Union Discussion Materials for the Board on February
6, 2023. HUT8_00002825- HUT8_00002873.
68. On February 6, 2023, Kroll provided its opinion to the Board (the “Opinion”).
HUT8_00002666-00002671. The Opinion concluded that the USBTC Exchange Ratio was “fair,
from a financial point of view, to Hut 8.” HUT8_00002671. Kroll, however, states that for its
analysis, Kroll “relied upon the accuracy, completeness, and fair presentation of all information,
data, advice, opinions and representations obtained from public sources or provided to it from
private sources, including the managements of the Company and USBTC, and did not
independently verify such information.” HUT8_00002668. Further, the Opinion states that no
independent appraisal or physical inspection of any specific assets or labilities was conducted.
HUT8_00002669.
69. Thus, the Opinion was reliant on information provided by the interested, Individual
Defendants who wanted the Merger completed. Further bolstering this point is the Opinion and
Order in the Securities Class Action, holding that the energy and internet problems at King
Mountain JV were knowable prior to the Merger and the risk statements were false as they already
materialized. Securities Class Action, ECF No. 57, at 57, 65.
15
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 16 of 53
70. Moreover, it is unclear if the Board challenged the accuracy of the representations
being made to them, including in a February 5, 2023 Board presentation purporting the post-
Merger entity would accelerate Hut 8’s ESG objectives as USBTC would introduce energy from
multiple sources including hydro, wind, and nuclear sources – expanding an energy portfolio.
HUT8_00002929. Specifically, the King Mountain JV’s location behind a wind farm has “peak
wind generation periods can draw up to 100% of the energy the wind produced”. Id.
71. In the same meeting, while noting that “Hut 8 and USBTC are strategically aligned”
(HUT8_00003608) and that the “New Hut [is] expected to advance diversified strategy and
operating rigor” (HUT8_00003609), the Director Defendants were also warned that “the Company
[USBTC] had acquired a 50% interest in an operating JV … Management have not performed a
proper accounting assessment of the impact of these transactions on the balance sheet. As such,
there is significant uncertainty on the pro-forma balance sheet and our ability to perform due
diligence was inherently limited.” HUT8_00003619 (emphasis added).
72. Similarly, Stifel in conducting its fairness analysis noted that it relied on a
“[s]ummary of [USBTC]’s mining asset inventory as provided by [USBTC] management on
January 9, 2023.” HUT8_00003633. Thus, assertions from Stifel that the “Proposed Transaction
is fair, from a financial point of view, to Hut 8” (HUT8_00003648) is based on information omitted
by the USBTC management which was known about (see CW 1 allegations, infra) and “uncertain”
financial information. HUT8_00003619.
73. Given their positions and personal interests in the creation of the post-Merger Hut
8, a reasonable inference is that the Individual Defendants intentionally ignored or exercised bad
faith in monitoring the risk associated with the Merger. The Individual Defendants allowed, and
16
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 17 of 53
participated in, the misrepresentation of the King Mountain JV’s operations, as demonstrated from
the Individual Defendants’ insufficient due diligence of USBTC.
MATERIALLY FALSE AND MISLEADING STATEMENTS
Statements Regarding the Benefits of the Merger
While Omitting Known Issues with King Mountain JV
74. A February 7, 2023 Hut 8 Presentation for investors titled “Strategic Merger of
[Legacy Hut] and [USBTC]” with a subheading, “Creating a leading energy and infrastructure
platform of the future,” represented that USBTC was expected to strengthen the Company’s
“energy strategy and commitment to leveraging low-cost renewable energy sources,” including
with, inter alia, “[a] diversified mix of hydro, wind, and nuclear energy sources powering the
expanded site portfolio.”
75. An analyst and investor call held at 8:30 a.m. E.T. on that same date similarly
emphasized the energy potential of the Merger, with Leverton stating: USBTC “brings outstanding
energy-sourcing management and hedging capabilities to [the Company], significantly enhancing
our ability to better plan around stable and predictable energy usage and mitigate fluctuating prices
across markets.”
76. The Registration Statement also touted the renewable energy sources powering
USBTC’s sites, stating that, “[t]he Echo facility at King Mountain is co-located behind the meter
at a wind farm, and at peak wind generation periods can draw up to 100% of the energy the wind
project produces to power mining and hosting; the rest of the time, the energy is sources from
ERCOT . . . .”
77. The Registration Statement acknowledged certain power generation-related risks,
including that disruptions of the energy grids on which USBTC relies could have adverse effects
on USBTC’s operations: “The operation of the grids USBTC relies on, including the . . . [Electrical
17
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 18 of 53
Reliability Counsel of Texas (ERCOT)] grid[] . . . subjects USBTC to a variety of risks, including
the breakdown and failure of equipment . . . [and] outages affecting information technology
systems.”
78. However, the above statements in the Registration Statement 1 – which were made
by Genoot and Ho, and are attributable to the Company and its senior executives, including the
Individual Defendants, who were involved in Hut 8’s day-to-day affairs and, upon information and
belief, the due diligence leading up to the Merger – are materially misleading because they failed
to disclose the energy issues that had already materialized at the King Mountain JV by the time
the statements were made.
79. The positive statements about the Merger were also misleading because they failed
to disclose known internet disruptions at the King Mountain JV. Although the Registration
Statement 2 purported to warn of the risks of a loss of internet connectivity, it did not disclose that
those risks had already materialized as the Registration Statement stated in part:
USBTC may face risks of Internet disruptions, which could have an adverse
effect on the price of Bitcoin.
A disruption of the Internet may affect the use of Bitcoin and subsequently the value
of USBTC’s securities. Generally, Bitcoin and USBTC’s business of mining digital
assets is dependent upon the Internet. A significant disruption in Internet
connectivity could disrupt a currency’s network operations until the disruption is
resolved and have an adverse effect on the price of Bitcoin and USBTC’s ability to
contribute computing power to pools that mine Bitcoin.
1
These statements are also incorporated by reference in the Forms S-8 insofar as the Forms
S-8 incorporate by reference the Prospectus.
2
The Forms S-8 incorporate the same misleading risk disclosure by reference insofar as they
incorporate the Prospectus by reference.
18
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 19 of 53
80. CW 1 3 – who worked as a data analyst for the Company in the months leading up
to the Merger and after the close of the Merger – had daily discussions with the Director of
Infrastructure before the Merger about the ongoing energy issues with the King Mountain JV.
Given CW 1’s position at pre and post-Merger Hut 8, CW 1 had personal knowledge of the
operations and deficiencies at the King Mountain JV.
81. According to CW 1, Genoot also complained about the efficiency of the King
Mountain JV during general meetings.
82. CW 1’s job responsibilities included analyzing mining data to attempt to maximize
operational capacity of the miners, which involved tracking miner outages on a daily basis, and
managing miner counts and total miner operations.
83. In that capacity, CW 1 saw evidence of the energy issues in the Hashrate failure
and energy usage reports he received. According to CW 1, the King Mountain JV had the most
inefficient miners, and this inefficiency impeded the ability to properly mine.
84. In addition, during CW 1’s tenure with the Company, there were often dips in the
network service with several outages and network failures.
85. The outages, which were reported in daily outage reports, were often significant
and caused by broken miners or offline miners.
86. CW 1 stated that senior management in Operations directed data analysts to classify
the outages in a manner that masked their true nature, such as characterizing the miners as
3
All allegations and statements attributable to Confidential Witness 1 (“CW 1”) are taken
from the Securities Class Action and are based upon information and belief. In the Securities Class
Action, the court held that the Consolidated Amended Complaint “describes CW 1 and pleads the
CW 1’s allegations with sufficient particularity for the Court to credit them at this stage of the
litigation.” Securities Class Action, ECF No. 57, at 61-62.
19
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 20 of 53
overheated and not offline, rather than an outage. Over half, or more, outages were falsely
reclassified as overheated.
87. Moreover, in a May 2023 Board presentation, the “immaturity of security controls
at US BTC” was warned of, noting that “systems integration should be limited or restricted until
baseline controls are implemented.” HUT8_00000802. Thus, from before the Merger, it was
apparent that USBTC and/or the King Mountain JV had significant issues facing it.
88. Accordingly, the above risk disclosure was materially misleading because the
Individual Defendants failed to disclose that the risk of internet disruptions had already
materialized by the time the statement was made and the Individual Defendants failed to disclose
the energy issues at the King Mountain JV. As reliable internet connectivity is critical for bitcoin
mining, a major component of both USBTC’s and the Company’s business. Indeed, Hut 8 derives
the bulk of its revenue from self-mining. Thus, the energy and internet disruptions at one of the
Company’s bitcoin mining sites was crucial to operations.
THE TRUTH EMERGES
89. On January 18, 2024, J Capital Research published a report entitled The Coming
HUT Pump and Dump with a subheading which read “management hiding stock ownership
through undisclosed related party, a stock promotor cabal, and a host of left-for-dead assets” (the
“Report”). The Report claimed that USBTC’s CEO, Defendant Ho, may be hiding ownership
shares through his partner, Anna Kudrjasova (“Kudrjasova”), via her company Anaya Capital
Corp.:
20
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 21 of 53
90. The Report describes how “[t]his is particularly significant, because Ho has
committed to a lock-up of 65% of his shares – but not hers. Anaya Capital appears to hold about
3.7 mln shares.” The Report details that Ho and Kudrjasova have been associated for nearly a
decade:
21
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 22 of 53
91. The Report also stated that King Mountain JV “has historically failed to provide
energy and high-speed internet,” and described an extensive history of a lack of connectivity,
despite the fact Bitcoin mining requires constant connectivity:
The King Mountain JV has been plagued with connectivity problems. In its 2023
Annual Report, published on March 16, 2023, MARA reported “the company
experienced significant production downtime in the second and third quarters . . .
and delays in energization at King Mountain.” MARA had 60,000 miners at the
facility, but according to a Proof of Claim MARA filed in the Compute North
bankruptcy case, the miners were never energized. MARA’s Statement of Claim
said that King Mountain lacked a high-speed internet connection
***
On November 23, 2022, MARA, which was the largest customer for the King
Mountain site, filed a motion stating that Compute North at King Mountain had
failed to energize its miners and failed to provide an adequate internet
connection.
***
MARA also said that there was a lack of high-speed connection at the facility.
***
USBTC itself was so disgruntled that it filed suit. Just one month before buying
the King Mountain JV, USBTC filed an action against CN King Mountain LLC
for failing to find a location where miners could be installed and energized.
***
Our diligence suggests that the facility now uses a Starlink satellite network instead
of a broad- band connection to access the internet. This is unheard of in the Bitcoin
mining industry. Starlink is an expensive and unreliable choice for mining at scale.
Said one interviewee who managed a large data center when asked if he would ever
use Starlink as primary internet source for Bitcoin mining at scale, he said “never.”
[Emphasis added].
92. The Report also stated that the Company overstates profitability by failing to
account for certain “interest expenses” concerning King Mountain JV:
22
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 23 of 53
The company is misleading on the profitability of the JV, with accounts showing
$665,000 of profit while completely ignoring about the $3.2 mln interest expense
incurred during the same period.
93. The Report also casted doubt on to other reported financials stating:
23
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 24 of 53
We are confused about how many miners USBTC has. The November 2023 Hut 8
operations update claims that USBTC had 46,225 Bitcoin miners deployed for
October 2023, and yet at the end of September 2023, USBTC reported operating
only 30,200 miners.
We find this ramp-up extremely unlikely, especially without disclosing new
machine orders or deposits for new miners in USBTC’s end September 2023
balance sheet. Remaining construction in progress was far less than the typical
purchase value for that many extra machines. Is USBTC telling the truth?
94. The Report further claimed that, without the Merger with Hut 8, an individual
“highly familiar” with USBTC stated the USBTC would have been forced to undergo a structured
bankruptcy:
One person highly familiar with USBTC told us, “without the merger, [USBTC]
would have done a structured bankruptcy.”
***
“The merger was a complete godsend for USBTC,” someone deeply involved with
the company told us. Without the merger, this person said, USBTC would have
been bankrupt within weeks. “It was very much in the cards.” In early 2023,
USBTC gave up almost half its miners, plus $20.7 mln and some other assets, in
an apparent default.
***
Our interviewee said that USBTC “begged” NYDIG to forgive the loan but soon
after Christ- mas was forced to surrender assets. Hut 8 managed to characterize
this default as a $23.7 mln GAIN on debt extinguishment. But it had started out
as a $24.2 mln LOSS that the company “fixed” through an accounting sleight of
hand. Abracadabra! [Emphasis added].
95. Finally, the Report concluded, based on a review of financial reports, “we estimate
a value for USBTC that’s as much as 70% less. Typically, such egregious over-payments occur
only when management is being enriched.” The Report continued:
‣ We are highly skeptical that the King Mountain JV is worth the $105 mln paid by
USBTC, given reports that the center at the time lacked both reliable power and
internet.
24
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 25 of 53
Nevertheless, we assign what we believe to be an aggressive $105 mln valuation –
the price USBTC paid for the facility. This is despite MARA’s recent purchase of
Granbury and Kearney, which indicates that the King Mountain JV would be worth
only $64 mln.
‣ Our valuation of USBTC’s Managed Infrastructure Operations (MIO) business is
$51 mln, a generous 3x forward revenue.
***
In total, we value the USBTC operating assets at the high end at $219 mln. Not
only do we suspect that USBTC overpaid for the King Mountain JV, but Hut 8
overpaid again, by a factor of four, for the same facility, along with the Niagara
mining facility and the two managed-facility contracts. New Hut issued 49.7 mln
shares in exchange for all US- BTC stock – a value of about $495 mln at the time.
Hut 8 also took on $160 mln in net debt plus around $90 mln in planned spending
commitments ($40 mln for AI equipment and $50 mln in planned capital
expenditure) in exchange for the USBTC and Legacy Hut assets. [Emphasis
added].
96. On this news, Hut 8’s stock price fell $2.16, or 23.3%, to close at $7.12 per share
on January 18, 2024, on unusually heavy trading volume.
THE INDIVIDUAL DEFENDANTS SOLD STOCK WHILE HUT 8’S
STOCK PRICE WAS ARTIFICALLY INFLATED
97. As a result of the above false and misleading statements, the Company’s share price
was artificially inflated. Certain of the Individual Defendants, while in possession of material, non-
public information, capitalized on the artificially inflated stock price by selling significant portions
of their holdings of Hut 8 common stock.
98. Specifically, Defendant Leverton sold 98,724 shares of her personally-held stock
on December 22, 2023 at an average share price of $14.21 for gross proceeds of $1,402,966. Then,
on January 12, 2024, Defendant Leverton sold 35,761 shares of her personally-held stock at an
average share price of $10.10, for gross proceeds of $361,257. In doing so, Defendant Leverton
received approximately $1,764,223 in total gross proceeds.
25
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 26 of 53
99. Defendant Visram sold 17,897 shares of his personally-held stock on December 22,
2023 at an average share price of $14.14 for gross proceeds of $253,063.
100. Collectively, Defendants Leverton and Visram collectively sold more than 150,000
shares of their personally-held stock for collective gross proceeds in excess of $2 million, just
before the truth emerged and the Company’s share price declined by mover than 23%. Defendants
Leverton and Visram were motivated to make materially false and misleading statements and
conceal material adverse information from investors so that they could personally profit from the
artificial inflation in the trading price of Hut 8’s common stock resulting from their false and
misleading statements and omissions before the truth was disclosed to the investing public.
DAMAGES TO THE COMPANY
Securities Class Action
101. On February 7, 2024, the Securities Class Action was commenced in the United
States District Court for the Southern District of New York against the Company, Genoot, Ho,
Leverton, and Visram. The operative Consolidated Amended Complaint (Securities Class Action,
Dkt. No. 39), was filed on June 14, 2024.
102. The court in the Securities Class Action denied, in part, the motion to dismiss the
Consolidated Amended Complaint – holding that the lead plaintiff pled claims pursuant to Sections
11 and 15 of the Securities Act.
103. As a result of the wrongs complained of herein, the Individual Defendants have
subjected the Company to the significant cost of defending itself and certain of the Company’s
officers. The Company will continue to incur significant sums in relation to the Securities Class
Action and any liability or settlement that results.
26
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 27 of 53
Unjust Compensation
104. At all relevant times, the Company paid lucrative compensation to each of the
Individual Defendants. The Company paid the Individual Defendants in connection with their
respective roles as officers and/or directors of the Company.
105. Accordingly, as part of their respective roles, the Individual Defendants were
required to, among other things, exercise due care and diligence in the management and
administration of the affairs of the Company, act ethically and in compliance with all laws and
regulations, maintain adequate internal controls, and conduct business in a fair and transparent
manner. Further, each of the Individual Defendants had additional duties and responsibilities owed
to the Company by virtue of their executive, directorial and/or committee roles, as described infra,
for which they were compensated.
106. However, the Individual Defendants failed to carry out their duties adequately or at
all, causing harm to the Company, as alleged herein. Because the Individual Defendants failed to
carry out their respective duties, the compensation they received was excessive and undeserved.
As such, the Individual Defendants were unjustly enriched to the detriment of the Company.
Additional Damage to the Company
107. In addition to the damages specified above, the Company will also suffer further
losses in relation to any internal investigations and amounts paid to lawyers, accountants, and
investigators in connection thereto.
108. The Company will also suffer losses in relation to the Individual Defendants’
failure to maintain adequate internal controls, including the expense involved with implementing
and maintaining improved internal controls.
27
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 28 of 53
109. The Company has also suffered, and will continue to suffer, a loss of reputation as
a direct and proximate result of the Individual Defendants’ misconduct which will plague the
Company’s share price going forward.
THE COMPANY’S MANDATE OF THE BOARD
110. The Company’s Mandate to the Board states in relevant part:
RESPONSIBILITIES AND DUTIES OF THE BOARD
The Board is responsible for the stewardship of the Company and providing
oversight as to the management of the business and affairs of the Company. It is
management’s duty to run the Company’s business on a day‐to-day basis. The
Board is expected to focus on guidance and strategic oversight, with the goal of
increasing long-term shareholder value. In discharging their duties, directors must
act honestly and in good faith, with a view to the best interests of the Company.
Directors must exercise the care, diligence and skill that a reasonably prudent
person would exercise in comparable circumstances.
The responsibilities and duties of the Board shall include the following:
Chief Executive Officer and Officers
• Appointing the Chief Executive Officer (the “CEO”) and, together with the
CEO, developing a written position description for the role of the CEO.
• Delegate to the CEO and other senior executives the authority over the day-
to-day management of the business and affairs of the Company.
• Developing the corporate goals and objectives that the CEO is responsible
for meeting and reviewing the performance of the CEO against such
corporate goals and objectives.
• Taking steps to satisfy itself as to the integrity of the CEO and other
executive officers and that the CEO and other executive officers create a
culture of integrity throughout the organization.
• Succession planning for the CEO and other key personnel.
• Approving the compensation of the CEO upon recommendation of the
Compensation Committee.
Financial Reporting
Approving: the annual financial statements and related Management’s Discussion
and Analysis, and their filing and disclosure; and the Company’s annual earnings
press releases, including any pro forma or non-GAAP information included therein,
and their filing and disclosure.
28
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 29 of 53
• Reviewing and monitoring, with the assistance of the Audit Committee:
i. the quality and integrity of the Company’s financial statements and related
information, including the Company’s accounting and financial reporting
processes and the audit of the Company’s financial statements;
ii. the external reporting of the Company’s financial and operating
performance in compliance with all regulatory and statutory requirements;
and
iii. the independence, qualifications, appointment and performance of the
Company’s external auditor.
Financial Reporting Processes, Accounting Policies and Internal Controls
• Reviewing and monitoring, with the assistance of the Audit Committee:
i. he adequacy and effectiveness of the Company’s system of internal controls
over financial reporting, including any significant deficiencies and
significant changes in internal controls;
ii. the quality and integrity of the Company’s external financial reporting
processes;
iii. the Company’s disclosure controls and procedures, including any
significant deficiencies in or material non-compliance with, such controls
and procedures; and
iv. the relationship of the Audit Committee with other committees of the Board
and management.
Ethical and Legal Compliance and Risk Management
• Reviewing and approving the Company’s Code of Business Conduct and
Ethics.
• Reviewing and monitoring:
i. compliance with the Code of Business Conduct and Ethics and other ethical
standards adopted by the Company; and
ii. the Company’s compliance with applicable legal and regulatory
requirements, though notwithstanding the foregoing and subject to
applicable law, nothing contained in this Mandate is intended to require the
Board to ensure the Company’s compliance with applicable laws or
regulations.
• In conjunction with management, identifying the principal risks of the
Company’s business and reviewing and monitoring management’s
implementation of appropriate systems to seek to effectively monitor,
manage and mitigate the impact of such risks.
29
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 30 of 53
THE COMPANY’S CORPORATE GOVERNANCE PRINCIPLES AND GUIDELINES
111. The Company’s Corporate Governance Principles and Guidelines state in relevant
part:
Board and Committee Mandates
The Board is responsible for the stewardship of the Company and has adopted the
Board Mandate setting out the Board’s responsibilities with respect to the
stewardship and oversight of the Company and providing for the establishment of
standing committees of the Board (which committees currently consist of the Audit
Committee, the Compensation and Talent Development Committee and the
Nominating, Environmental, Social and Governance Committee (the “NESG
Committee”). The mandates of these committees are set out in their respective
charters.
The Board shall review and assess, or may delegate to the NESG Committee to
review and assess, the adequacy of the Board and committee mandates and
recommend any proposed changes to the Board for consideration.
Every charter must be disclosed in accordance with the listing standards, policies
and guidelines of relevant stock exchanges and securities laws, including, if
applicable, the Toronto Stock Exchange and National Instrument 58-101 –
Corporate Governance Guidelines, and made publicly available on the Company’s
website.
Corporate Governance The Board has delegated responsibility to the NESG
Committee for developing the Company’s approach to corporate governance for
the Board’s approval, including recommending modifications to these Governance
Guidelines for consideration by the Board.
THE COMPANY’S AUDIT COMMITTEE CHARTER
112. The Company’s Audit Committee Charter states in relevant part:
I. PURPOSE
The Committee’s purpose is to assist the Board in its oversight of:
• the quality and integrity of the Company’s financial statements and related
information, including the Company’s accounting and financial reporting
processes and the audit of the Company’s financial statements;
• the independence, qualifications, appointment and performance of the
Company’s external auditor (the “external auditor”);
30
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 31 of 53
• the Company’s disclosure controls and procedures, internal control over
financial reporting, and management’s responsibility for assessing and
reporting on the effectiveness of such controls;
• the organization and performance of the Company’s internal audit function;
• the Company’s compliance with applicable legal and regulatory
requirements; and
• the Company’s enterprise risk management processes.
II. ACCESS TO INFORMATION AND AUTHORITY
In carrying out its duties and responsibilities, the Committee shall have the
authority to:
• communicate directly with the external auditor and to meet with and seek
any information it requires from employees, officers, directors or external
parties;
• review the plan and any significant reports of the internal auditors and meet
with persons responsible for the internal audit function;
• investigate any matter relating to the Company’s accounting, auditing,
internal control or financial reporting practices or anything else within its
scope of responsibility;
• take whatever actions it deems appropriate, in its sole discretion, to foster
an internal culture within the Company that results in the development and
maintenance of a superior level of financial reporting standards, sound
business risk practices and ethical behavior;
• obtain full access to all Company books, records, facilities and personnel;
and
• at its sole discretion and at the Company’s expense, retain and set the
compensation of outside legal, accounting or other advisors, as necessary to
assist in the performance of its duties and responsibilities.
The Company will provide appropriate funding, as determined by the Committee,
for compensation to the external auditor, to any advisors that the Committee
chooses to engage and for payment of ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out its duties.
***
IV. RESPONSIBILITIES AND DUTIES OF THE COMMITTEE
In addition to such other duties as may from time to time be expressly assigned to
the Committee by the Board, the Committee shall have the following
responsibilities and duties:
Financial Reporting
31
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 32 of 53
• Prepare an audit committee report to be included in the Company’s annual
proxy circular.
• Prior to their public disclosure, review and discuss with management and,
if applicable, the external auditor or the internal auditor:
(i) the Company’s annual financial statements and the related MD&A,
including the discussion of critical accounting estimates under the
Generally Accepted Accounting Principles (“GAAP”) included
therein and, if appropriate, recommend to the Board the approval,
filing and disclosure of such information;
(ii) the Company’s annual earnings press releases, including any pro
forma or non-GAAP information included therein;
(iii) the Company’s quarterly unaudited financial statements and
associated MD&A, including the discussion of critical accounting
estimates included therein;
(iv) the Company’s quarterly earnings press releases, including any pro
forma or non-GAAP information included therein;
(v) the type and presentation of financial information and earnings
guidance provided to analysts, ratings agencies and others;
(vi) to the extent they include financial information extracted or derived
from the Company’s financial statements, other public reports or
filings by the Company, including the Company’s annual report on
Form 10-K and proxy circular;
(vii) internal controls (or summaries thereof) and the integrity of the
financial reporting and related attestations by the external auditor of the
Company’s internal control over financial reporting;
(viii) any significant difficulties encountered during the course of the audit,
including, but not limited to, any restrictions on the scope of work or
access to required information; and
(ix) the Company’s guidelines and policies governing the process of risk
assessment and risk management.
THE COMPANY’S CODE OF BUSINESS CONDUCT AND ETHICS
113. Hut 8 maintains a Code of Business Conduct and Ethics (the “Code”). The Code
states that it was “designed to promote integrity and deter wrongdoing” and that it applies to
“[e]very Company director, officer, employee and other personnel that the Company may
determine should be subject to this Code of Business Conduct and Ethics, such as contractors or
consultants (each a ‘Covered Person’)[.]”
114. The Code warns Covered Persons that any violation of the code of conduct,
“including fraudulent reports, may result in disciplinary action including termination of
32
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 33 of 53
employment for cause or termination of service and, if warranted, legal proceedings.”
115. The Code contains a section titled “Standards of Good Professional Ethics,” in
which it states that: “[a]ll of the Company’s business activities and affairs must be carried out
ethically and honestly. The Company expects all Covered Persons to conduct themselves with
honesty and integrity and to avoid even the appearance of improper behavior.”
116. With respect to compliance with applicable laws, the Code mandates that all
Covered Persons: “[a]lways follow applicable laws, rules and regulations and do not engage in any
type of illegal, unethical, fraudulent or corrupt business practices for any reason. The Company
expects each Covered Person to understand the legal and regulatory requirements applicable to his
or her business unit and areas of responsibility.” The Code goes on to specify that “Covered
Persons must comply with applicable insider trading laws, which generally prohibit buying or
selling securities of the Company while in possession of material non-public information about
the Company.”
117. In a section titled “Ensure Financial Integrity,” the Code further provides:
The Company is committed to the transparency and integrity of publicly filed
financial reports and other communications. Covered Persons must do their part to
ensure that the Company’s public disclosure is full, fair, accurate, timely and
understandable.
Always act responsibly and exercise sound judgment regarding matters involving
the Company’s finances. Keep accurate, complete and timely records, and submit
accurate and complete reports. Do not mislead, manipulate or improperly influence
the Company’s finance team or external auditors or make any false or misleading
statements or omissions in the Company’s public disclosure. Covered Persons
should not personally enter into any side agreements or other informal
arrangements, written or oral, related to the Company.
DUTIES OF THE DIRECTOR DEFENDANTS
118. As members of the Company’s Board, the Director Defendants were held to the
highest standards of honesty and integrity and charged with overseeing the Company’s business
33
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 34 of 53
practices and policies and assuring the integrity of its financial and business records.
119. The conduct of the Director Defendants complained of herein involves a knowing
and culpable violation of their obligations as directors and officers of the Company, the absence
of good faith on their part, and a reckless disregard for their duties to the Company and its investors
that the Director Defendants were aware posed a risk of serious injury to the Company.
120. By reason of their positions as officers and/or directors of the Company, and
because of their ability to control the business and corporate affairs of the Company, the Director
Defendants owed the Company and its investors the fiduciary obligations of trust, loyalty, and
good faith. The obligations required the Director Defendants to use their utmost abilities to control
and manage the Company in an honest and lawful manner. The Director Defendants were and are
required to act in furtherance of the best interests of the Company and its investors.
121. Each director of the Company owes to the Company and its investors the fiduciary
duty to exercise loyalty, good faith, and diligence in the administration of the affairs of the
Company and in the use and preservation of its property and assets. In addition, as officers and/or
directors of a publicly held company, the Director Defendants had a duty to promptly disseminate
accurate and truthful information with regard to the Company’s operations, finances, and financial
condition, as well as present and future business prospects, so that the market price of the
Company’s stock would be based on truthful and accurate information.
122. To discharge their duties, the officers and directors of the Company were required
to exercise reasonable and prudent supervision over the management, policies, practices, and
controls of the affairs of the Company. By virtue of such duties, the officers and directors of the
Company were required to, among other things:
(a) ensure that the Company complied with its legal obligations and
34
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 35 of 53
requirements, including acting only within the scope of its legal authority and
disseminating truthful and accurate statements to the SEC and investing public;
(b) conduct the affairs of the Company in an efficient, businesslike manner so
as to make it possible to provide the highest quality performance of its business, to avoid
wasting the Company’s assets, and to maximize the value of the Company’s stock;
(c) properly and accurately guide investors and analysts as to the true financial
condition of the Company at any given time, including making accurate statements about
the Company’s business prospects, and ensuring that the Company maintained an adequate
system of financial controls such that the Company’s financial reporting would be true and
accurate at all times;
(d) remain informed as to how the Company conducted its operations, and,
upon receipt of notice or information of imprudent or unsound conditions or practices,
make reasonable inquiries in connection therewith, take steps to correct such conditions or
practices, and make such disclosures as necessary to comply with federal and state
securities laws;
(e) ensure that the Company was operated in a diligent, honest, and prudent
manner in compliance with all applicable federal, state and local laws, and rules and
regulations; and
(f) ensure that all decisions were the product of independent business judgment
and not the result of outside influences or entrenchment motives.
123. Each Director Defendant, by virtue of his/her position as a director and/or officer,
owed to the Company and to its shareholders the fiduciary duties of loyalty, good faith, and the
exercise of due care and diligence in the management and administration of the affairs of the
35
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 36 of 53
Company, as well as in the use and preservation of its property and assets. The conduct of the
Director Defendants complained of herein involves a knowing and culpable violation of their
obligations as directors and officers of the Company, the absence of good faith on their part, and
a reckless disregard for their duties to the Company and its shareholders that the Director
Defendants were aware, or should have been aware, posed a risk of serious injury to the Company.
124. The Director Defendants breached their duties of loyalty and good faith by causing
the Company to issue false and misleading statements concerning the financial condition of the
Company. As a result, the Company has expended, and will continue to expend, significant sums
of money related to investigations and lawsuits and to structure settlements to resolve them.
DERIVATIVE AND DEMAND FUTILITY ALLEGATIONS
125. Plaintiffs bring this action derivatively in the right and for the benefit of the
Company to redress injuries suffered and to be suffered as a direct and proximate result of the
Individual Defendants’ breaches of fiduciary duties, gross mismanagement, and other wrongful
conduct as alleged herein.
126. Plaintiffs will adequately and fairly represent the interests of the Company and its
shareholders in enforcing and prosecuting its rights and have retained counsel competent and
experienced in derivative litigation.
127. Plaintiffs are current owners of the Company’s common stock and have
continuously been owners of the Company’s stock during the times relevant to the Director
Defendants’ wrongful course of conduct alleged herein. Plaintiffs understand their obligation to
hold stock throughout the duration of this action and are prepared to do so.
128. Because of the facts set forth herein, Plaintiffs have not made a demand on the
Board to institute this action against the Individual Defendants. Such a demand would be a futile
36
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 37 of 53
and useless act because the Board is incapable of making an independent and disinterested decision
to institute and vigorously prosecute this action.
129. At the time this suit was filed, the Company’s Board was comprised of nine (9)
members – including Defendants Tai, Ho, Genoot, Hefti, Flinn, Shattuck, O’Neal, Wilkinson, and
Rickertsen. At the time of filing this Consolidated Complaint, Defendant Hefti had left the Board,
leaving just eight (8) directors. Thus, Plaintiffs are required to show that a majority of the Director
Defendants cannot exercise independent objective judgement about whether to bring this action or
whether to vigorously prosecute this action.
130. The Director Defendants (or at the very least a majority of them) cannot exercise
independent objective judgment about whether to bring this action or whether to vigorously
prosecute this action. For the reasons that follow, and for reasons detailed elsewhere in this
complaint, Plaintiffs have not made (and should be excused from making) a pre-filing demand on
the Board to initiate this action because making a demand would be a futile and useless act.
THE DIRECTOR DEFENDANTS ARE
NOT INDEPENDENT OR DISINTERESTED
The Director Defendants Each Face a Substantial Likelihood of Liability
131. Each of the Director Defendants face a likelihood of liability in this action because
they caused and/or permitted the Company to make false and misleading statements and omissions
concerning the information described herein. Because of their advisory, managerial, and directorial
positions within the Company, the Director Defendants had knowledge of material, non-public
information regarding the Company and were directly involved in the operations of the Company
at the highest levels.
132. The Director Defendants either knew or should have known of the false and
misleading statements that were issued on the Company’s behalf and took no steps in a good faith
37
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 38 of 53
effort to prevent or remedy that situation.
133. Each of the Director Defendants, by virtue of their roles, were required to, among
other things: (i) ensure that the Company complied with its legal and regulatory obligations and
requirements; (ii) properly and accurately guide investors and analysts as to the true financial
condition of the Company at any given time; (iii) remain informed as to how the Company
conducted its operations, make reasonable inquiries, and take steps to correct any improper
conditions or practices; and (iv) ensure the Company was operated in a diligent, honest, and
prudent manner. Despite this, the Director Defendants failed to fulfil these duties by permitting
the false and misleading statements to be made and not correcting those statements.
134. As trusted Company directors, the Director Defendants conducted little, if any,
oversight of the scheme to cause the Company to make false and misleading statements,
consciously disregarded their duties to monitor such controls over reporting and engagement in
the scheme, and consciously disregarded their duties to protect corporate assets.
135. Each of the Director Defendants approved and/or permitted the wrongs alleged
herein to have occurred and participated in efforts to conceal or disguise those wrongs from the
Company’s stockholders or recklessly and/or with gross negligence disregarded the wrongs
complained of herein and are therefore not disinterested parties.
136. Each of the Director Defendants reviewed, authorized, signed, and thus personally
made and/or otherwise permitted the false Registration Statement to be disseminated directly to
the public and made available and distributed to shareholders, authorized and/or permitted the
issuance of various false and misleading statements, and are principal beneficiaries of the
wrongdoing alleged herein, and thus, could not fairly and fully prosecute such a suit even if they
instituted it. Each of the Director Defendants either signed and/or authorized the dissemination of
38
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 39 of 53
Registration Statement.
137. Demand on the Board is additionally futile as each of the Director Defendants held
leadership positions or were directors of Legacy Hut or USBTC prior to the Merger and thus had
a personal interest in seeing the completion of the Merger. Specifically, Defendants Tai, Hefti,
Flinn and Rickertsen were directors at pre-Merger Hut 8 and Defendants O’Neal, Shattuck, and
Wilkinson were directors of USBTC. Both Defendants Ho and Genoot were co-founders and in
leadership positions at USBTC. Given this conflict, none of the Director Defendants could be
considered independent or objectively consider a demand to sue.
138. Additionally, each of the Director Defendants received payments, benefits, stock
options, and other emoluments by virtue of their membership on the Board and their control of the
Company.
139. Despite having knowledge of the history of their own misconduct and
mismanagement, the Director Defendants have failed to seek recovery for the Company for any of
the misconduct alleged herein.
Defendant Genoot
140. The principal professional occupation of Defendant Genoot is his employment with
the Company as its CEO, pursuant to which he has received and continues to receive substantial
monetary compensation and other benefits, and accordingly he is conflicted and cannot impartially
consider a demand. As such, Defendant Genoot cannot independently consider any demand to sue
himself for breaching his fiduciary duties to the Company, because that would expose him to
liability and threaten his livelihood.
141. As CEO, Defendant Genoot also fails the stock exchange bright-line independence
test and cannot, therefore, be considered independent. As such, Defendant Genoot could not
39
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 40 of 53
objectively and disinterestedly consider a demand to sue the Individual Defendants and any
demand upon Defendant Genoot is therefore futile. Further, the Company’s proxy statement, filed
with the SEC on April 28, 2026 (the “2026 Proxy Statement”), admits that Genoot is not an
independent director.
142. Defendant Genoot also personally reviewed, signed, authorized, and/or made the
false and misleading statements alleged herein in the Registration Statement and in other public
forums. Thus, as the main perpetrators of the wrongdoing alleged herein, Defendant Genoot is
irreconcilably conflicted, faces a substantial likelihood of liability, and cannot consider a demand
to sue.
143. Defendant Genoot is not independent from Defendants Shattuck III, Rickertsen,
and Wilkinson because they comprise the Compensation Committee and are responsible for
evaluating and determining the compensation of the CEO (Defendant Genoot). The purpose of the
Compensation Committee is to assist the Board in discharge of its responsibilities related to the
compensation and benefits provided by the Company to its CEO and executive officers. Because
of his status as an inside director, and the concomitant substantial compensation he receives,
Defendant Genoot could not consider a demand adverse to the other Director Defendants serving
on the Compensation Committee who are responsible for his financial future. See, e.g., Rales v.
Blasband, 634 A.2d 927, 937 (Del. 1993); Steiner v. Meyerson, 1995 WL 441999, at *10 (Del. Ch.
July 19, 1995); In re The Student Loan Corp. Derivative Litig., 2002 WL 75479, at *3 (Del. Ch.
Jan. 8, 2002); In re Veeco Instruments, Inc. Sec. Litig., 434 F. Supp. 2d 267, 275 (S.D.N.Y. 2006)
(applying Delaware law) (fact of director’s deriving his principal income from employment by the
corporation makes it improbable that he could perform his fiduciary duties without bring
influenced by his overriding personal interest) (citing In re General Motors (Hughes) S’holder
40
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 41 of 53
Litig., 2005 WL 1089021, at *8 (Del. Ch. May 4, 2005)).
144. In addition, Defendant Genoot co-founded USBTC with Defendant Ho, with whom
he shares extensive professional and personal relationships as a result. As such, Defendant Genoot
could not reasonably consider a demand to sue Defendant Ho, the individual he built a business
and a strong personal and professional relationship with.
145. Because of Defendant Genoot’s participation in the gross dereliction of fiduciary
duties, and breaches of the duties of due care, good faith, and loyalty, Defendant Genoot is unable
to comply with his fiduciary duties and prosecute this action.
Defendant Ho
146. The principal professional occupation of Defendant Ho is his employment with the
Company as its CSO, pursuant to which he has received and continues to receive substantial
monetary compensation and other benefits, and accordingly he is conflicted and cannot impartially
consider a demand. As such, Defendant Ho cannot independently consider any demand to sue
himself for breaching his fiduciary duties to the Company, because that would expose him to
liability and threaten his livelihood.
147. As CSO, Defendant Ho also fails the stock exchange bright-line independence test
and cannot, therefore, be considered independent. As such, Defendant Ho could not objectively
and disinterestedly consider a demand to sue the Individual Defendants and any demand upon
Defendant Ho is therefore futile. Further, the 2026 Proxy Statement admits that Ho is not an
independent director.
148. Defendant Ho also personally reviewed, signed, authorized, and/or made the false
and misleading statements alleged herein in the Registration Statement and in other public forums.
Thus, as the main perpetrators of the wrongdoing alleged herein, Defendant Ho is irreconcilably
41
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 42 of 53
conflicted, faces a substantial likelihood of liability, and cannot consider a demand to sue.
149. Defendant Ho is not independent from Defendants Shattuck III, Rickersten and
Wilkinson because they comprise the Compensation Committee and are responsible for evaluating
and determining the compensation of the CSO (Defendant Ho). The purpose of the Compensation
Committee is to assist the Board in discharge of its responsibilities related to the compensation
and benefits provided by the Company to its CSO and executive officers. Because of his status as
an inside director, and the concomitant substantial compensation he receives, Defendant Ho could
not consider a demand adverse to the other Director Defendants serving on the Compensation
Committee who are responsible for his financial future. See, e.g., Rales v. Blasband, 634 A.2d
927, 937 (Del. 1993); Steiner v. Meyerson, 1995 WL 441999, at *10 (Del. Ch. July 19, 1995); In
re The Student Loan Corp. Derivative Litig., 2002 WL 75479, at *3 (Del. Ch. Jan. 8, 2002); In re
Veeco Instruments, Inc. Sec. Litig., 434 F. Supp. 2d 267, 275 (S.D.N.Y. 2006) (applying Delaware
law) (fact of director’s deriving his principal income from employment by the corporation makes
it improbable that he could perform his fiduciary duties without bring influenced by his overriding
personal interest) (citing In re General Motors (Hughes) S’holder Litig., 2005 WL 1089021, at *8
(Del. Ch. May 4, 2005)).
150. Further, for the period December 4, 2020 through January 5, 2021, USBTC entered
into secured promissory notes with various existing investors of USBTC, including USBTC’s CEO
and director, Michael Ho, a family member of Defendant Ho and a family member of USBTC’s
President and director, Asher Genoot. Additionally, USBTC entered into secured promissory
notes with Jonathan Honig, a former beneficial owner of more than 5% of the voting securities of
USBTC at the time of the transaction, and an entity controlled by Jonathan Honig (collectively
referred to as “Honig”), Erica Groussman, a former beneficial owner of more than 5% of the voting
42
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 43 of 53
securities of USBTC at the time of the transaction (“Mrs. Groussman”) and an entity controlled by
an immediate family member of Tara Stetson (the entity, together with Mrs. Stetson, collectively
referred to as the “Stetsons”), a former beneficial owner of more than 5% of the voting securities
of USBTC at the time of the transaction. The principal balances of the notes totaled approximately
$5.9 million. Of the $5.9 million in notes, approximately an aggregate of $1.12 million of the notes
were held by Defendant Ho and his family member, $0.1 million was held by Defendant Genoot’s
family member, approximately $2.4 million was held by Honig, $0.25 million was held by Mrs.
Groussman and $0.25 million was held by the Stetson Entity.
151. In addition, Defendant Ho co-founded USBTC with Defendant Genoot, with whom
he shares extensive professional and personal relationships as a result. As such, Defendant Ho
could not reasonably consider a demand to sue Defendant Genoot, the individual he built a business
and a strong personal and professional relationship with
152. Because of Defendant Ho’s participation in the gross dereliction of fiduciary duties,
and breaches of the duties of due care, good faith, and loyalty, Defendant Ho is unable to comply
with his fiduciary duties and prosecute this action.
Defendants Flinn, O’Neal and Shattuck
153. Defendants Flinn, O’Neal, and Shattuck served as members of the Audit
Committee. Pursuant to the Company’s Audit Committee Charter, the members of the Audit
Committee are responsible for, inter alia, overseeing the accounting and financial reporting
processes of the Company and the audits of the financial statements of the Company and the audits
of the financial statements of the Company, and otherwise meet their responsibilities as set forth
in the Audit Committee Charter as set forth herein.
154. The Individual Defendants breached their fiduciary duties of due care, loyalty, and
43
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 44 of 53
good faith, because the Audit Committee, inter alia, allowed or permitted false and misleading
statements to be disseminated in the Company’s SEC filings and other disclosures and, otherwise,
failed to ensure that adequate internal controls were in place regarding the serious accounting and
business reporting issues and deficiencies described above. Therefore, the Individual Defendants
face a substantial likelihood of liability for their breach of fiduciary duties and any demand upon
them is futile.
Additional Reasons Demand is Excused
155. The Company has been and will continue to be exposed to significant losses due to
the wrongdoing complained of herein, yet the Director Defendants have not caused the Company
to take action to recover for the Company the damages it has suffered and will continue to suffer
thereby.
156. The Company, at all material times, had its Code and related corporate governance
policies which required each of the Individual Defendants to maintain the highest standards of
honesty and integrity, particularly in relation to accurate and truthful public disclosures. Yet,
despite this Code and other relevant policies and committee charters, each of the Director
Defendants failed to ensure that the Company upheld high standards of integrity, misrepresented
facts to the investing public, and failed to report any concerns, or investigate any misconduct, let
alone commence litigation against the Individual Defendants.
157. In violation of the Code, the Director Defendants conducted little, if any, oversight
of the Company’s engagement in the Individual Defendants’ scheme to cause the Company to
issue materially false and misleading statements to the public and to facilitate and disguise the
Individual Defendants’ violations of law, including breaches of fiduciary duty, waste of corporate
assets, and unjust enrichment. In violation of the Code, the Director Defendants failed to comply
44
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 45 of 53
with laws and regulations, failed to maintain the accuracy of company records, public reports, and
communications, and failed to uphold the responsibilities related thereto. Thus, the Director
Defendants face a substantial likelihood of liability and demand is futile as to them.
158. The Director Defendants received, and continue to receive, substantial salaries,
bonuses, payments, benefits, and other emoluments by virtue of their membership on the Board.
They have benefitted from the wrongs alleged herein and have engaged therein to preserve their
positions of control and the prerequisites thereof and are incapable of exercising independent
objective judgment in deciding whether to bring this action.
159. The Director Defendants’ conduct described herein and summarized above could
not have been the product of legitimate business judgment as it was based on bad faith and
intentional, reckless, or disloyal misconduct. Thus, none of the Director Defendants can claim
exculpation from their violations of duty pursuant to the Company’s charter (to the extent such a
provision exists). As a majority of the Director Defendants face a substantial likelihood of liability,
they are self-interested in the transactions challenged herein and cannot be presumed to be capable
of exercising independent and disinterested judgment about whether to pursue this action on behalf
of the shareholders of the Company. Accordingly, demand is excused as being futile.
160. Publicly traded companies, such as Hut 8, typically carry director and officer
liability insurance from which the Company could potentially recover some or all of its losses.
However, such insurance typically contains an “insured vs. insured” disclaimer that will foreclose
a recovery from the insurers if the Individual Defendants sue each other to recover the Company’s
damages. If no such insurance is carried, then the Director Defendants will not cause the Company
to sue the Individual Defendants named herein, since, if they did, they would face a large uninsured
individual liability. Accordingly, demand is futile in that event.
45
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 46 of 53
161. Accordingly, each of the Director Defendants, and at least a majority of them,
cannot reasonably consider a demand with the requisite disinterestedness and independence.
Indeed, any demand upon the Director Defendants is futile and, thus, excused.
FIRST CAUSE OF ACTION
(Against the Individual Defendants for Breach of Fiduciary Duties)
162. Plaintiffs incorporate by reference and re-allege the allegations contained in ¶¶1-7,
29-124 above, as though fully set forth herein.
163. The Individual Defendants owe the Company fiduciary obligations. By reason of
their fiduciary relationships, the Individual Defendants owed and owe the Company the highest
obligation of good faith, fair dealing, loyalty, and due care.
164. The Individual Defendants violated and breached their fiduciary duties of care,
loyalty, reasonable inquiry, and good faith.
165. The Individual Defendants engaged in a sustained and systematic failure to properly
exercise their fiduciary duties. Among other things, the Individual Defendants breached their
fiduciary duties of loyalty and good faith by allowing the Company to improperly misrepresent
the Company’s publicly reported financials. These actions could not have been a good faith
exercise of prudent business judgment to protect and promote the Company’s corporate interests.
166. As a direct and proximate result of the Individual Defendants’ failure to perform
their fiduciary obligations, the Company has sustained significant damages. As a result of the
misconduct alleged herein, the Individual Defendants are liable to the Company.
167. As a direct and proximate result of the Individual Defendants’ breach of their
fiduciary duties, the Company has suffered damage, not only monetarily, but also to its corporate
image and goodwill. Such damage includes, among other things, costs associated with defending
46
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 47 of 53
securities lawsuits, severe damage to the share price of the Company, resulting in an increased cost
of capital, the waste of corporate assets, and reputational harm.
SECOND CAUSE OF ACTION
(Against The Individual Defendants for Gross Mismanagement)
168. Plaintiffs incorporate by reference and re-allege the allegations contained in ¶¶1-7,
29-124 above, as though fully set forth herein.
169. By their actions alleged herein, the Individual Defendants, either directly or through
aiding and abetting, abandoned and abdicated their responsibilities and fiduciary duties with regard
to prudently managing the assets and business of the Company in a manner consistent with the
operations of a publicly held corporation.
170. As a direct and proximate result of the Individual Defendants’ gross
mismanagement and breaches of duty alleged herein, the Company has sustained significant
damages in excess of hundreds of millions of dollars.
171. Because of the misconduct and breaches of duty alleged herein, the Individual
Defendants are liable to the Company.
THIRD CAUSE OF ACTION
(Against the Individual Defendants for Waste of Corporate Assets)
172. Plaintiffs incorporate by reference and re-allege the allegations contained in ¶¶1-7,
29-124 above, as though fully set forth herein.
173. The wrongful conduct alleged regarding the issuance of false and misleading
statements was continuous, connected, and on-going. It resulted in continuous, connected, and
ongoing harm to the Company.
174. As a result of the misconduct described above, the Individual Defendants wasted
47
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 48 of 53
corporate assets by, inter alia: (i) paying excessive compensation and bonuses to certain of its
executive officers; (ii) awarding self-interested stock options to certain officers and directors; and
(iii) incurring potentially millions of dollars of legal liability and/or legal costs to defend the
Individual Defendants’ unlawful actions.
175. As a result of the waste of corporate assets, the Individual Defendants are liable to
the Company.
FOURTH CAUSE OF ACTION
(Against The Individual Defendants for Unjust Enrichment)
176. Plaintiffs incorporate by reference and re-allege the allegations contained in ¶¶1-7,
29-96, 104-106 above, as though fully set forth herein.
177. By their wrongful acts, violations of law, and inaccurate and untruthful information
and/or omissions of material fact that they made and/or caused to be made, the Individual
Defendants were unjustly enriched at the expense of, and the detriment of, the Company
178. The Individual Defendants either benefitted financially from the improper conduct,
or received bonuses, stock options, or similar compensation from the Company that was tied to
the performance of the Company or its stock price or received compensation or other payments
that were unjust in light of the Individual Defendants’ bad faith conduct.
179. Plaintiffs, as shareholders and representatives of the Company, seek restitution
from the Individual Defendants and seek an order from this Court disgorging all profits, including
from insider transactions, the redemption of preferred stock, benefits, and other compensation,
including any performance-based or valuation-based compensation, obtained by the Individual
Defendants due to their wrongful conduct and breach of their fiduciary and contractual duties.
48
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 49 of 53
FIFTH CAUSE OF ACTION
(Against Defendants Leverton, Visram, Ho and Genoot for Contribution Under § 11(f) of
the Securities Act and 21D of the Exchange Act)
180. Plaintiffs incorporate by reference and re-allege the allegations contained in ¶¶1-7,
29-103 above, as though fully set forth herein.
181. Defendants Leverton, Visram, Ho, and Genoot, along with Hut 8, along with the
are defendants in the Securities Class Action, that asserts claims against Hut 8 as a joint tortfeasor
for violations of Sections 11 and 15 of the Securities Act.
182. The lead plaintiff in the Securities Class Action alleges that the Company’s
Registration Statement contained untrue statements of material facts and omitted to state material
facts necessary to make the statements not misleading. Hut 8, as the issuer of securities, is strictly
liable to the lead plaintiff and putative class in the Securities Class Action under Section 11 of the
Securities Act for the misstatements and misleading omissions contained therein.
183. The lead plaintiff in the Securities Class Action alleges that Leverton, Visram, Ho,
and Genoot made a reasonable investigation or possessed reasonable grounds for the belief that
the statements contained in the Registration Statements were true, without omissions of any
material facts, and not misleading. The Individual Defendants were responsible for the contents
and dissemination of the Registration Statements. Due to their positions of control and authority
as officers and/or directors of Hut 8, Defendants Leverton, Visram, Ho, and Genoot were able to
and did, directly and/or indirectly, exercise control over the business and corporate affairs of the
Company, including the wrongful acts complained of herein and in the Securities Class Action.
184. Accordingly, Defendants Leverton, Visram, Ho, and Genoot are liable under
Section 11(f) of the Securities Act, 15 U.S.C. § 77k(f)(1), that creates a private right of action for
contribution, Section 21D of the Exchange Act, 15 U.S.C. § 78u-4(f), which governs the
49
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 50 of 53
application of a private right of action for contribution arising out of violations of the Securities
Act.
185. Hut 8 is entitled to receive all appropriate contribution or indemnification
Defendants from Leverton, Visram, Ho, and Genoot
SIXTH CAUSE OF ACTION
(Against Defendants Leverton and Visram for Insider Selling
and Misappropriation of Information)
186. Plaintiffs incorporate by reference and re-allege the allegations contained in ¶¶1-7,
25-27, 29-100 above, as though fully set forth herein.
187. At the time Defendants Leverton and Visram sold their stock as stated above, they
knew of the deficiencies of the King Mountain JV and sold Hut 8 stock on the basis of such
information.
188. This information about the King Mountain JV was proprietary non-public
information concerning Hut 8. It was a proprietary asset belonging to Hut 8, which Defendants
Leverton and Visram used for their own benefit when they sold Company stock.
189. Defendants Leverton’s and Visram’s sales of Hut 8 stock while in possession and
control of this material adverse non-public information was a breach of their fiduciary duties of
loyalty and good faith.
190. Because the use of Hut 8’s proprietary information for their own gain constitutes a
breach of Leverton’s and Visram’s fiduciary duties, the Company is entitled to the imposition of
a constructive trust on any profits that Defendants Leverton and Visram obtained thereby.
50
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 51 of 53
SEVENTH CAUSE OF ACTION
(Against Defendants Leverton and Visram for Unjust Enrichment)
191. Plaintiffs incorporate by reference and re-allege the allegations contained in ¶¶1-
7, 25-27, 29-100 above, as though fully set forth herein.
192. The Leverton and Visram have been unjustly enriched by their sales of Hut 8 stock
while in possession and control of material adverse non-public information. This material adverse
non-public information was a proprietary asset belonging to Hut 8, which Leverton and Visram
used for their own benefit at the expense of, and to the detriment of, the Company
193. Plaintiffs, as a stockholders and representatives of Hut 8, seek restitution from
Defendants Leverton and Visram and seek an order from this Court disgorging all profits from
their insider sales.
REQUEST FOR RELIEF
WHEREFORE, Plaintiffs demand judgment as follows:
A. Determining that this action is a proper derivative action maintainable under law,
and that demand is excused;
B. Awarding, against all the Director Defendants and in favor of the Company, the
damages sustained by the Company as a result of the Individual Defendants’
breaches of fiduciary duties, gross mismanagement, unjust enrichment, waste of
corporate assets, and violations of the Securities Act and/or Exchange Act;
C. Directing the Company to take all necessary actions to reform and improve its
corporate governance and internal procedures, to comply with the Company’s
existing governance obligations and all applicable laws and to protect the Company
and its investors from a recurrence of the damaging events described herein,
including but not limited to removing and replacing its officers and directors;
51
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 52 of 53
D. Awarding to Plaintiffs the costs and disbursements of the action, including
reasonable attorneys’ fees, accountants’ and experts’ fees, costs, and expenses; and
E. Granting such other and further relief as the Court deems just and proper.
JURY DEMAND
Plaintiffs demand a trial by jury on all issues so triable.
Dated: May 14, 2026. Respectfully submitted,
EGGNATZ | PASCUCCI
By: /s/_Joshua H. Eggnatz
Joshua H. Eggnatz
Michael J. Pascucci
7450 Griffin Rd, Ste. 230
Davie, FL 33314
Telephone: (954) 889-3359
Facsimile: (954) 889-5913
Email: JEggnatz@JusticeEarned.com
Email: Mpascucci@JusticeEarned.com
Local Counsel for Plaintiffs
GAINEY McKENNA & EGLESTON
Thomas J. McKenna
Gregory M. Egleston (pro hac vice)
260 Madison Avenue, 22nd Fl.
New York, NY 10016
Tel: (212) 983-1300
Fax: (212) 983-0383
Email: tjmckenna@gme-law.com
Email: gegleston@gme-law.com
Leal Counsel for Plaintiffs Wesley Aliko
and Matthew Medney
THE ROSEN LAW FIRM, P.A
Laurence M. Rosen
Erica L. Stone (pro hac vice)
275 Madison Avenue, 40th Floor
New York, NY 10016
Telephone: (212) 686-1060
Email: lrosen@rosenlegal.com
52
Case 1:24-cv-20890-DSL Document 34 Entered on FLSD Docket 05/14/2026 Page 53 of 53
Email: estone@rosenlegal.com
Lead Counsel for Plaintiff Alexander Jiang
CERTIFICATE OF SERVICE
I hereby certify that on this 14th day of May 2026, I electronically filed the foregoing
document with the Clerk of the Court using CM/ECF. I also certify that the foregoing document
is being served this day on all counsel of record via transmission of Notices of Electronic Filing
generated by CM/ECF.
/s/ Joshua H. Eggnatz
53