On January 11, 2021, analyst J Capital Research published a report alleging that Bit Digital operates a “fake crypto currency business,” that is “designed to steal funds from investors.” J Capital continued that although Bit Digital claims “it was operating 22,869 bitcoin miners in China,” that this “is simply not possible.” J Capital wrote that it “verified with local governments supposedly hosting the BTBT mining operations that there are no bitcoin miners there.” J Capital alleged that “the bitcoin business BTBT discloses is completely fraudulent.” The market was stunned by this report, and Bit Digital’s stock price fell $6.27 in one day, or approximately 25%, to close at $18.76 on January 11, 2021.
The case, captioned Nitcheu v. Bit Digital, Inc., et al., No. 1:21-cv-02262 (S.D.N.Y.), was filed in the U.S. District Court for the Southern District of New York. Additional related cases are also on file in the same Court before the Honorable Andrew L. Carter, Jr., including Pauwels v. Bit Digital, Inc., No. 1:21-cv-00515 (S.D.N.Y.), and Yang v. Bit Digital, Inc., No. 1:21-cv-00721 (S.D.N.Y.). The new Nitcheu action extends the class period to fall between December 21, 2020 and January 11, 2021. The deadline to move for lead plaintiff is March 22, 2021.