Hut 8 agrees to $2.35 million settlement in USBTC merger suit

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Hut 8 settles USBTC case

Highlights

Hut 8 agreed to pay $2.35 million to settle investor claims tied to its 2023 USBTC merger.
The settlement still requires approval from a federal court in New York.
Hut 8 denies wrongdoing and does not admit liability under the deal.
The case centered on alleged disclosure issues at USBTC’s King Mountain site in Texas.

A settlement without admission

According to Crypto News, the case covered investors who bought or acquired Hut 8 securities during a class period linked to the USBTC merger. Plaintiffs alleged that Hut 8 and other defendants misled investors about USBTC operations and the value of assets brought into the combined company.

The dispute centered on King Mountain, a Texas joint venture in which USBTC held a 50% interest before the merger. Investors said disclosures failed to fully describe power curtailment and internet connectivity problems at the site. A court earlier dismissed Exchange Act claims and some Securities Act claims, but allowed claims tied to alleged King Mountain disclosures to proceed.

Hut 8 denied wrongdoing. The settlement filing said defendants do not admit liability and continue to deny misconduct or violations of law. The proposed $2.35 million payment represents about 19.6% of estimated maximum recoverable damages, above the median and average recovery levels cited for Securities Act-only settlements in 2025.

King Mountain remains the core issue

The litigation gained attention after a January 2024 short-seller report by J Capital Research questioned the value of USBTC assets and alleged that King Mountain lacked reliable power and high-speed internet access at key points before the merger.

The settlement filing also noted litigation risk. Defendants had planned to challenge whether investors could trace shares to the merger registration documents because registered and unregistered shares later mixed in the market.

A legal cleanup as the strategy changes

The settlement comes as Hut 8 tries to reposition itself beyond Bitcoin mining. The market story for Hut 8 now centers more on power access, compute capacity, AI data centers and high-performance computing.

Hut 8 signed a 15-year, $9.8 billion lease for a 352-megawatt Texas facility built around NVIDIA reference architecture. The settlement narrows one merger-era dispute, but investors will still judge the company on whether the AI and HPC shift can support its valuation.

We have previously highlighted that Bitcoin miners operate near breakeven as profitability declines.

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