A federal securities class action lawsuit has been filed against cryptocurrency company Bitfarms Ltd. and several of its executives, alleging financial misconduct.
According to the complaint filed by plaintiff Bonito Olympio, Bitfarms, which operates Bitcoin data centers in North and South America, misled investors by misclassifying proceeds from digital asset sales in its financial statements. According to the complaint, this misclassification contributed to an inflated portrayal of the company's financial health during the period from March 21, 2023, to December 9, 2024. The plaintiff claims that Bitfarms made materially false statements regarding its internal controls over financial reporting and failed to disclose weaknesses in its accounting practices.
The complaint states that the company reported proceeds from Bitcoin sales as cash flow from operating activities instead of investing activities, resulting in allegedly misleading financial reports. It also alleges that Bitfarms overstated its efforts to address material weaknesses in its financial controls related to warrants issued in 2021.
According to the complaint, on December 9, 2024, Bitfarms acknowledged these reporting errors and announced plans to restate its financial statements for fiscal years 2022 and 2023, following a review by the U.S. Securities and Exchange Commission. After the announcement, the company’s stock price declined by more than six percent.
The plaintiff seeks damages on behalf of investors who purchased Bitfarms securities at allegedly inflated prices and incurred losses following corrective disclosures.
The plaintiff is represented by attorneys Jeremy A. Lieberman, J. Alexander Hood II, and Thomas H. Przybylowski of Pomerantz LLP. The case was filed in the United States District Court for the Eastern District of New York under Case ID: 1:25-cv-02630.