#United States #New York #Class Action #Pomerantz LLP #Bitfarms Ltd

Class Action Lawsuit Filed Against Bitfarms Ltd.

Pomerantz LLP, a well-known law firm specializing in securities class actions, recently announced the initiation of a class action lawsuit against Bitfarms Ltd. (NASDAQ: BITF) along with several of its officers. This lawsuit has been filed in the United States District Court for the Eastern District of New York, under the case number 25-cv-02630. The claims involve investors who purchased Bitfarms securities during a specified class period, from March 21, 2023, to December 9, 2024.

The driving force behind the lawsuit stems from allegations that Bitfarms engaged in violations of federal securities laws, specifically under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, alongside Rule 10b-5. Investors who acquired Bitfarms securities and believe they have been adversely affected by these asserted violations are encouraged to contact Pomerantz LLP before the July 8, 2025, deadline to potentially serve as the Lead Plaintiff in this case. Copies of the complaint are accessible through the Pomerantz Law Firm’s website.

Background on Bitfarms

Bitfarms operates a number of integrated Bitcoin mining facilities across various countries including Canada, the United States, Paraguay, and Argentina. The company is engaged in the process of validating transactions on the Bitcoin blockchain, commonly referred to as BTC mining. Following the mining process, Bitfarms retains these Bitcoins as digital assets or converts them into U.S. dollars via cryptocurrency exchanges. Additionally, the firm disclosed its financing strategy, which notably involves the calculated sale of its Bitcoin assets.

In the realm of financial reporting, the proper accounting of proceeds from asset sales is crucial for transparency and compliance. Bitfarms must accurately reflect cash flows in its financial statements, requiring a discerning classification between operating revenues and proceeds from investing activities. The company's internal financial controls, by its own admission, faced significant scrutiny when, in 2024, Bitfarms identified a material weakness in its internal control over financial reporting—particularly relating to the classification of the warrants it issued in 2021.

Allegations of Misrepresentation

According to the complaint filed, there are claims that throughout the class period, Bitfarms' management made several materially false and misleading statements about the firm’s business operations and overall outlook. The lawsuit specifically alleges that Bitfarms failed to disclose critical deficiencies in its internal controls over financial reporting. This includes improperly categorizing proceeds from sales of digital assets, inaccurately asserting the completion of remediation processes for previously identified weaknesses, and overstating its financial position in multiple public disclosures.

On December 9, 2024, backlash against the company intensified when Bitfarms admitted that material errors in their financial statements for 2022 and 2023 required significant restatement. This admission followed scrutiny from the SEC and pointed to the incorrect classification of asset proceeds, drastically affecting their financial reporting and future disclosures. As a direct consequence, Bitfarms’ stock experienced a notable decline, dropping 6.07% in the immediate aftermath of this revelation.

The Road Ahead

As Bitfarms looks to address these legal claims and restore investor confidence, it has been vocal about implementing corrective measures, which include the expansion of its finance team and engaging external consultants with expertise in complex financial reporting matters. However, the timeline for complete remediation of the identified weaknesses has been extended into 2025, diverging from prior assurances of a 2024 conclusion.

Pomerantz LLP has a notable legacy within the class action arena, having secured billions in damages for investors impacted by violations of securities laws. This latest class action against Bitfarms is yet another initiative underlining the firm’s unwavering commitment to holding corporations accountable for any transgressions.

Investors impacted by Bitfarms' allegedly misleading practices may wish to consult with the legal team at Pomerantz to understand their rights and the potential for recovery avenues in this lawsuit. Additional contact information is readily available on the firm’s website for prospective class members seeking guidance.

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