Hut 8 Corp. has agreed to pay $2.35 million to settle a securities class action alleging it misled investors about operational risks at a Texas Bitcoin mining site linked to its 2023 merger with US Bitcoin Corp. (USBTC), according to a preliminary settlement approval motion filed June 22 in the US District Court for the Southern District of New York.
The proposed all-cash settlement covers investors who acquired Hut 8 securities in the United States between Feb. 13, 2023, and Jan. 18, 2024. The agreement follows a mediator’s proposal accepted by both parties on May 13, 2026. Lead Plaintiff Abhishek Maheshwari has asked the court to grant preliminary approval, certify the settlement class, and schedule a final fairness hearing.
According to court filings, the settlement represents roughly 19.6% of the estimated $12.08 million in maximum recoverable damages, exceeding both the median and average recovery rates for Securities Act-only cases reported in 2025.
Lawsuit Centered on King Mountain Disclosures
The litigation stems from complaints filed in February and March 2024 that were later consolidated. Plaintiffs alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, claiming Hut 8 and related parties made misleading statements about energy and internet issues at the King Mountain mining joint venture in Texas and about USBTC’s financial condition before the merger.
The operative complaint focused on two categories of alleged misstatements. One concerned operational challenges at the King Mountain site, a digital asset mining facility operated by US Data Mining Group, while the other related to USBTC’s financial condition before the merger. Hut 8 has since continued expanding its Texas footprint, including the launch of its Vega data center in the Texas Panhandle, a facility designed for Bitcoin mining and high-performance computing.
In September 2025, the court dismissed all Exchange Act claims and the Securities Act claims tied to USBTC’s finances. However, it allowed Securities Act claims concerning risk disclosures related to the King Mountain facility and the Texas ERCOT power grid to proceed. Defendants subsequently indicated they would challenge whether investors could trace their shares to the merger registration statement.
Hut 8 Settlement Terms and Class Recovery
The settlement was reached after a full-day virtual mediation session before JAMS mediator Jed D. Melnick on May 7, 2026. Although the session ended without an agreement, Melnick later issued a proposal that both sides accepted. Under the deal, class members will release their claims in exchange for the settlement payment, while Hut 8 continues to deny wrongdoing and admits no liability. Pomerantz LLP, appointed lead counsel in April 2024, plans to seek attorneys’ fees of up to one-third of the settlement fund, plus interest, and a service award of up to $10,000 for the lead plaintiff.
The settlement arrives as Hut 8 continues to diversify beyond Bitcoin mining. In December 2025, the company secured a 15-year lease agreement valued at approximately $7 billion to develop a 245-megawatt AI data center at its River Bend campus in Louisiana, with AI cloud platform Fluidstack serving as tenant and Google providing a financial backstop. Likewise, in January, it further strengthened its balance sheet by expanding its credit facility with Coinbase to $200 million for general corporate purposes.
