#United States #New York #Pomerantz Law #Business Litigation #Bitfarms Ltd

Pomerantz Law Firm Files Class Action Against Bitfarms Ltd.

The renowned Pomerantz Law Firm has announced its latest legal endeavor—a class action lawsuit against Bitfarms Ltd., a prominent player in the cryptocurrency industry, particularly known for its Bitcoin mining operations. This lawsuit was filed in the United States District Court for the Eastern District of New York and is focused on claims that the company, along with certain officers, engaged in practices that violated federal securities laws.

Background on Bitfarms Ltd.

Bitfarms, identified by the NASDAQ ticker BITF, operates integrated Bitcoin mining facilities across various countries including Canada, the United States, Paraguay, and Argentina. These facilities, equipped with specialized computers known as miners, are dedicated to validating transactions on the Bitcoin blockchain. Once BTC is mined, Bitfarms either holds these assets or trades them for U.S. dollars using established cryptocurrency trading platforms. The company's business strategy also includes the selective sale of its digital currency assets.

Details of the Class Action

The class action, filed under the case number 25-cv-02630, pertains to all individuals and entities that acquired Bitfarms securities from March 21, 2023, to December 9, 2024. Investors are seeking to recover damages for losses incurred due to alleged misstatements and omissions by the company’s officers regarding essential aspects of its business and financial health.

Applicants for the Lead Plaintiff role in this suit must act by July 8, 2025. Interested parties can access the complaint and further details through Pomerantz Law's official website.

Key Allegations

According to the complaint, Bitfarms and its executives engaged in misleading practices that negatively impacted its investors by making false statements about the company’s financial operations. Specifically, it is alleged that:

1. Inadequate Internal Controls: There were significant deficiencies in the company's internal controls over financial reporting, which led to incorrect categorization of proceeds from digital asset sales.
2. Misclassification of Financial Activities: The defendants allegedly misrepresented cash flows from the sale of digital assets, categorizing them as operational cash flow instead of investing activities.
3. Deception Regarding Remediation: The company overstated its progress in addressing identified material weaknesses in its internal controls.
4. Financial Statements Errors: Due to these misrepresentations, numerous financial statements were misleading, leading to potential restatements of previously issued results.

The issues surrounding the classification of the 2021 Warrants, financial instruments used by the company for capital raising, have also attracted scrutiny. In March 2024, Bitfarms admitted to a material weakness related to financial reporting, acknowledging that the controls over the related transactions were ineffective.

Impact of the Legal Action

The ramifications of Bitfarms’ alleged missteps were made evident when, following the company's disclosure of a material misclassification in their financial statements for the fiscal years 2022 and 2023, its stock price saw a significant decline. On December 9, 2024, following this revelation, shares dropped by over 6%, reflecting investor concerns regarding the company’s fiscal integrity.

Moreover, Bitfarms' subsequent Annual Report on Form 40-F disclosed that its plans for remediation of the identified weaknesses had been delayed, another significant point that could affect investor confidence moving forward.

Conclusion

Pomerantz Law Firm, celebrating more than 85 years of leadership in class action litigation, continues to stand firm in defense of investors by fighting against securities fraud and corporate misconduct. Their latest class action against Bitfarms serves as a reminder of the importance of transparency and ethical practices within the rapidly evolving cryptocurrency sector. Investors affected by these issues are encouraged to seek legal guidance to ensure their voices are heard in this significant case.

For further inquiry regarding participation in the class action, investors may contact Pomerantz directly at the provided communication channels. Pomerantz remains dedicated to championing the rights of investors across various sectors and continues to commit resources toward this critical legal battle against Bitfarms.