On January 14, 2021,analyst Culper Research published a report entitled “CleanSpark (CLSK): Back to the Trash Can.” In this report, Culper alleged that CleanSpark “is an insider enrichment scheme which, at every turn of its promotion, has vastly overstated or simply fabricated key elements of its business, including purported customers and contracts.” Culper continued that “CleanSpark’s entire ‘business’ has been built upon lies and deceit.” The market was stunned by this report, and shares fell by approximately 9.2% to close at $35.71 on January 14, 2021.
A lawsuit has been filed against CleanSpark and certain of its executives in the U.S. District Court for the Southern District of New York. The lawsuit is captioned Bishins v.CleanSpark, Inc., et al., No. 21-cv-00511 (S.D.N.Y.). The suit alleges that CleanSpark misled investors as to the Company’s customer and contract figures and that several of CleanSpark’s recent acquisitions involved undisclosed related party transactions.