Bitcoin mining company Iris Energy has come under intense scrutiny as a class action lawsuit alleges the Australian Bitcoin mining company overstated its computing capabilities and misled investors about its high performance computing (HPC) prospects. be.
The lawsuit, filed Oct. 7 in the Eastern District of New York, seeks to represent shareholders who purchased IREN securities between June 20, 2023 and July 11, 2024.
The lawsuit, led by investor Paul Williams Israel, alleges that IREN misrepresented its ability to transition from Bitcoin mining to HPC, specifically stating that its data centers are inadequate for such operations. claims.
The mining company's Childress, Texas, site lacks the necessary infrastructure for HPC, such as backup power and proper cooling systems, and claims the company misled investors by advertising the facility as HPC-ready. I am doing it. The complaint alleges that Iris Energy made “materially false and misleading statements,” stating that “the Childress County, Texas, site is unsuitable for use in its data center business, and that the company “We knew, or should have known, that it was unlikely to be of our own design,” he added. Working in the Childress field. ”
Iris Energy did not respond to requests for comment. decryption.
The lawsuit alleges that the facility had only one power line and no backup power, making it unreliable for the continuous, high-stakes operations required in an HPC environment.
The complaint names Iris Energy co-founders Daniel Roberts and William Roberts and chief financial officer Belinda Nucifora as defendants.
The lawsuit comes at a time when Iris Energy is seeking recognition in both Bitcoin mining and HPC. A July Bernstein report identified IREN as one of the top Bitcoin mining companies with upside potential, citing its power strategy and operational efficiency as key strengths.
Plaintiffs also point out that the company's infrastructure spending was far below what was needed for true HPC capabilities. An expert analysis from Calper Research cited in the complaint found that Iris Energy spent less than $1 million per megawatt to build the data center.
This is significantly lower than the $10 million to $20 million per megawatt that industry experts estimate is needed for HPC-enabled equipment, raising questions about the company's ability to compete in the high-performance computing market.
In addition to infrastructure concerns, the lawsuit also points to insider activity as a major red flag. Daniel and William Roberts began selling their shares in early 2024, shortly before the company publicly announced its transformation to HPC.
According to the complaint, these stock sales suggested the co-founders knew the company's statements about its HPC capabilities were exaggerated and were trying to protect their personal investments before the truth came out. It is said that there is
The lawsuit seeks damages for investors affected by these alleged violations of federal securities laws.
Iris Energy has not yet commented on the lawsuit, which is expected to move forward in the coming months.
Edited by Stacey Elliott.
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