Hut 8 will pay $2.35 million to investors: the cost of mistakes in the merger with US Bitcoin
Mining company Hut 8 has reached an agreement to pay $2.35 million to settle a class action lawsuit filed by investors following its merger with U.S. Bitcoin Corp (USBTC). The deal still requires approval from the Federal Court for the Southern District of New York, but the fact of the settlement itself speaks volumes.
The Essence of the Claims
The lawsuit was filed on behalf of Hut 8 security holders who acquired them between February 13, 2023, and January 18, 2024. The company insists it does not admit any violations, and the settlement is not an admission of guilt. However, investor attention was drawn to the details of the deal closed in November 2023.
The plaintiffs alleged that Hut 8 and USBTC overstated the benefits of the merger and failed to disclose critical problems at the King Mountain facility in Texas. USBTC owned a 50% stake in the King Mountain JV joint venture before the merger. Among the claims were potential power supply disruptions and lack of access to high-speed internet, as well as allegations of an undisclosed related party among USBTC's major shareholders. Furthermore, the lawsuit stated that without the Hut 8 deal, USBTC could have faced bankruptcy, and its actual value was 70% lower than the amount paid by the miner.
Why the Amount Was Modest
In September 2025, Judge Victor Marrero partially granted the defendants' motion to dismiss the case, rejecting claims under the Exchange Act and leaving only part of the claims under the Securities Act concerning the King Mountain JV. The court did not consider USBTC's financial condition before the merger. Thus, the dispute was narrowed down to one question: how fully the risks associated with the King Mountain infrastructure were disclosed in the deal documents. For a mining business, where stability of power supply and network is fundamental, this is a critically important aspect.
The Path to the Agreement
On May 7, 2026, the parties held a virtual mediation session, which did not yield an immediate result, but by May 13, they had accepted the mediator's proposal. The formal agreement is dated June 18. Investors valued the $2.35 million as 19.6% of the maximum possible recovery of $12.08 million, which they believe is above average for similar cases.
Recall that the merger of Hut 8 and USBTC, announced in February 2023, was intended to create a powerful public miner with 5.6 EH/s of installed capacity for self-mining and 220 MW of hosting infrastructure at King Mountain. After the deal, Hut 8 increased its focus on AI infrastructure and high-performance computing, signing a 15-year lease for the Beacon Point campus in Texas in May for $9.8 billion.
Expert Commentary: This case is a classic example of how underestimating operational risks in mergers can lead to costly litigation. For Hut 8, the $2.35 million sum is a price for reputational damage and the opportunity to move forward, focusing on AI. However, the lesson for the entire industry is clear: transparency in disclosing technical and financial details is not just ethics, but a strategic necessity.