Argo, the heavily indebted blockchain, faced a class action lawsuit alleging misleading investors during its initial public offering (IPO) in 2021. The lawsuit comes as Argo Blockchain’s stock price has plummeted 98 percent over the past few days. At the time of the IPO, Argo had been offering its shares at a price of $15 (approximately Rs.1,222) and now the price is at $0.2 (approximately Rs.16). This means a 98 percent drop in share prices.
The Argo blockchain had generated around US$105 million (about Rs8.56 billion) at the time of its IPO. Argo had released 7.5 million ADS tokens, with each token costing $15 (about Rs. 1,222).
in one legal actionEarly investors in the Argo blockchain said the developers behind the platform hid important information from them, such as the battle with rising electricity prices.
“The offering documents were prepared negligently and as a result contained untrue statements of material facts or failed to state other facts necessary for the statements made to be misleading and were not prepared in accordance with the rules and regulations governing their preparation ‘ the filing said.
In December of last year, Argo had Blockchain announced the sale of its mining facility in Dickens County, Texas for US$65 million (about Rs.5.40 billion).
The mining company will use the funds from this sale to initiate and complete repayments of the outstanding loans.
In the past seven months, the global crypto industry lost over US$200 billion (around Rs.16,32,270 billion) due to market volatility, low investor risk appetite, hacks and the failure of promising projects.
While several crypto-related firms have filed for bankruptcy or laid off their employees, the crypto mining The industry also suffered.
According to Bloomberg reportBitcoin miners lost over $1 billion (around Rs. 8,200 crore) during the recent crypto crash.
For now, the unfolding of this lawsuit is planned for the coming weeks.
Argo Blockchain has not yet commented on the subject.
