Mining company Hut 8 has agreed to pay $2.35 million to settle a class-action lawsuit related to its merger with U.S. Bitcoin Corp. The agreement is subject to approval by the U.S. District Court for the Southern District of New York, according to CoinDesk.
The lawsuit was filed on behalf of investors who purchased Hut 8 securities in the U.S. or on American exchanges between February 13, 2023, and January 18, 2024. The company did not admit to any wrongdoing and stated that the settlement does not imply acceptance of the allegations.
Details of the Lawsuit
The case pertains to the merger between Hut 8 Mining Corp. and US Bitcoin (USBTC), which was completed in November 2023. The deal was executed through a stock exchange, resulting in the formation of Hut 8 Corp.
The plaintiffs claimed that the company overstated the benefits of the merger and failed to disclose issues at the King Mountain mining site in Texas. Prior to the merger, USBTC owned 50% of the King Mountain JV. According to documents from the law firm Glancy Prongay & Murray, the claims included potential problems with power supply and high-speed internet at the site, as well as allegations of undisclosed related-party transactions among major USBTC shareholders.
The lawsuit also stated that without the merger with Hut 8, USBTC could have faced bankruptcy, with its value estimated to be about 70% lower than the amount Hut 8 paid for the asset. Hut 8 and other defendants denied any violations.
Why the Settlement Amount Was Limited
On September 12, 2025, Judge Victor Marrero partially granted the defendants' motion to dismiss the case. The court fully dismissed claims under the Exchange Act, while leaving only a portion of the claims under the Securities Act related to statements about King Mountain JV. Claims regarding USBTC's financial condition prior to the merger were also rejected.
This narrowed the dispute to whether the merger documents adequately disclosed the risks associated with King Mountain. This is a critical factor for the mining business, as bitcoin mining and hosting depend on stable access to power and network infrastructure.
How the Parties Reached an Agreement
On May 7, 2026, the parties held a one-day virtual mediation session. While it did not lead to an immediate agreement, on May 13, the parties accepted the mediator's proposal. The formal settlement agreement is dated June 18.
The plaintiffs noted that the $2.35 million settlement represents about 19.6% of the maximum possible recovery of $12.08 million. They believe this is above recent averages for settlements in cases where only Securities Act claims remained. The agreement must undergo preliminary and final court approval.
The merger between Hut 8 and USBTC was announced in February 2023. The companies stated that the merger would create a major public miner with 5.6 EH/s of installed capacity for self-mining, 220 MW of hosting infrastructure at King Mountain, and approximately 825 MW of total capacity across all operations.
After the merger, Hut 8 retained its mining business while also increasing its focus on AI infrastructure and high-performance computing. In May, the company announced a 15-year lease for the first phase of the Beacon Point campus in Texas, valued at $9.8 billion.
In March, Hut 8 introduced a modular infrastructure model that allows for flexible switching of computing power between AI tasks and bitcoin mining.