Overview of Recent Class Action Lawsuit Filed Against Bitfarms Ltd. and Its Officers
Class Action Lawsuit Against Bitfarms Ltd.
On June 17, 2025, Pomerantz LLP announced the initiation of a class action lawsuit against Bitfarms Ltd., a company listed on NASDAQ under the ticker BITF. The case was filed in the United States District Court for the Eastern District of New York and registered under docket number 25-cv-02630. This lawsuit targets Bitfarms and certain executives within the company, representing a class of all individuals and entities—excluding the defendants—who purchased or acquired Bitfarms securities from March 21, 2023, to December 9, 2024, referred to as the Class Period. The aim is to recover damages resulting from alleged violations of federal securities laws, specifically under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as Rule 10b-5, which governs securities fraud.
Investors who acquired Bitfarms securities during the specified Class Period have until July 8, 2025, to petition the Court to appoint them as Lead Plaintiff in this class action. Interested parties can access the Complaint on the Pomerantz Law Firm website or reach out to attorney Danielle Peyton for further discussions about the case.
Bitfarms operates Bitcoin mining facilities across several countries, including Canada, the United States, Paraguay, and Argentina. These data centers utilize specialized computers known as miners to validate Bitcoin transactions. Once mined, the Bitcoin can be retained as digital assets or sold for U.S. dollars via cryptocurrency trading platforms. The company's business model involves strategies around selling its mined Bitcoin as part of its overall financing strategy.
The class action outlines significant concerns regarding Bitfarms' internal financial controls. In March 2024, the company disclosed a material weakness in its financial reporting controls, notably related to the classification of 2021 Warrants. These warrants—derivatives that allow holders to purchase securities at predetermined prices—were incorrectly categorized, affecting the overall integrity of Bitfarms' financial representations.
The lawsuit alleges that the defendants made false and misleading statements throughout the Class Period regarding the company's financial stability and reporting practices. Specifically, it is claimed that Bitfarms had inadequate internal controls over its financial reporting processes that led to misstatements in its financial documents. Not only did Bitfarms allegedly misclassify sales proceeds from digital assets, but they also failed to disclose the extent of the deficiencies in their reporting system.
On December 9, 2024, Bitfarms announced that its consolidated financial statements for the fiscal years 2022 and 2023 contained critical classification errors that required them to be restated. This admission led to a significant decline in Bitfarms' stock price, which dropped by 6.07% following the announcement. The subsequent filings indicated that the company was unable to execute its remediation plans for the identified weaknesses within the originally stipulated timeline, pushing completion into 2025.
Alongside the legal ramifications, the implications for investors are substantial. The potential for restated financials means that previous investment evaluations based on inaccurate statements may have misled investors, warranting the ongoing legal scrutiny as claimed in the lawsuit. Interested investors are encouraged to remain informed about the proceedings and consider their positions carefully regarding Bitfarms and its management.
Pomerantz LLP is recognized as a leading firm in the field of corporate and securities class-action litigation, with a long-standing history of advocating for victims of securities fraud and corporate malfeasance. Founded by Abraham L. Pomerantz, a pioneer in class-action lawsuits, the firm has a reputation for securing substantial recoveries for class members.
For further inquiries or participation details, investors can reach out to the Pomerantz firm, emphasizing the significant unpredictability surrounding the outcome of this lawsuit and its potential impact on Bitfarms and its stakeholders.