Bitcoin Miner Bit Digital Hits Back in ‘False Allegations’ of Fraud

The Nasdaq-listed bitcoin mining company Bit Digital (BTBT) dismissed allegations of fraud against the company made in a recently published report by J Capital Research.

Without specifically naming the report, a press release from the mining company responded to “false allegations” about its business. He reiterated financial disclosures from Q3 2020 on the size and scale of its operations, noting that an “overview of all our bitcoin mining operations” is publicly available on the US Securities and Exchange Commission (SEC) website.

Among other claims, the report by J Capital called the filing of Bit Digital, which showed it operates nearly 23,000 bitcoin mining machines in China, “a lie simply.”

In December, Bit Digital announced a $ 13.9 million agreement to buy nearly 18,000 Whatsminer and Antminer ASICs. The manufacturer of Whatsminer MicroBT did not respond to a request for comment from CoinDesk.

J Capital also called Bit Digital a “bitcoin counterfeit business,” claiming to have verified with Chinese local government officials that Bit Digital has “no bitcoin miners” there, casting doubt on the validity of its Asian mining operations in China.

Bit Digital said that all of its mining operations in mainland China are controlled by XMAX Hong Kong, and that all “utility bills and other expenses” are paid to Hong Kong suppliers.

The company’s stock rose over 400% between December 28, 2020, and January 4, 2021, peaking above $ 32 and pushing the company above a $ 1 billion market value. J Capital published its report a week later on January 11. Since then, Bit Digital’s shares have fallen over 35% to around $ 16.

Bit Digital responded to nothing from CoinDesk emails seeking comment. CoinDesk was also unable to contact Bit Digital’s mining operations facility managers in Asia.

The company also mines in the US, however. In Texas and Nebraska, Bit Digital owns a total of 2,100 machines in facilities managed by Minnesota-based mining infrastructure company Compute North.

Compute North CEO Dave Perrill told CoinDesk that his company has always had a “very healthy partnership” with Bit Digital, confirming the 2,000 machines in Nebraska and 100 in Texas that his company manages.

On a phone call, Perrill said his team was also “in talks about significantly increasing operations” with Bit Digital. He said he could not speak to his client’s Asian mining facilities.

Bit Digital started bitcoin mining in February 2020.