#United States #New York #Pomerantz LLP #NASDAQ BITF #Bitfarms Ltd

Pomerantz Law Firm Files Class Action Against Bitfarms Ltd.

On June 27, 2025, Pomerantz LLP announced the filing of a class action lawsuit against Bitfarms Ltd., a prominent company in the cryptocurrency sector, and several of its key executives. This legal action, recorded in the United States District Court for the Eastern District of New York under case number 25-cv-02630, targets all individuals and entities—excluding the defendants—who purchased Bitfarms securities between March 21, 2023, and December 9, 2024. The lawsuit aims to recover financial damages that stem from alleged violations of federal securities laws committed by Bitfarms and its officers.

Background on the Case

Pomerantz LLP, known for its focus on corporate and securities litigation, contends that Bitfarms misled investors regarding its operational and financial practices. Specifically, the class action seeks to enforce remedies under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, along with Rule 10b-5, which deals with securities fraud. Investors aiming to be recognized as Lead Plaintiffs must submit their applications by July 8, 2025. For additional details about the complaint, interested parties can reference the law firm’s website at www.pomerantzlaw.com or contact attorney Danielle Peyton directly.

Overview of Bitfarms

Bitfarms is a significant player in the Bitcoin mining industry, operating integrated data centers in countries including Canada, the United States, Paraguay, and Argentina. The company focuses on the operational aspects of Bitcoin mining—which include using high-performance computers to validate transactions on the Bitcoin blockchain. The mined Bitcoin is either retained as digital assets or sold on various cryptocurrency exchanges for US dollars.

Bitfarms' financial strategy has involved selling its Bitcoin holdings strategically to maximize cash flow, which is crucial for its operations. A company’s cash flow statement typically includes three critical sections: cash flow from investing activities, cash flow from operating activities, and cash flow from financing activities. However, the plaintiffs allege that Bitfarms misclassified essential cash flows related to its operations, leading to misleading financial reporting.

Allegations of Misconduct

The lawsuit claims that Bitfarms' management made materially inaccurate and misleading statements about its financial health and operational integrity. Specifically, they assert that Bitfarms had inadequate internal controls over financial reporting, which led to an improper classification of cash flows derived from digital asset sales. Notably, in 2021, Bitfarms issued financial instruments known as warrants. A subsequent audit revealed that these warrants should have been classified as financial liabilities, not as equity instruments as previously asserted.

Moreover, the lawsuit contends that throughout the Class Period, the company's management overrepresented the efficacy of its internal controls, claiming remediation of identified weaknesses that had not been implemented effectively as of the end of 2024. On December 9, 2024, Bitfarms publicly acknowledged that its consolidated financial statements from 2022 to 2023 contained material errors that necessitated revisions. This disclosure led to a significant drop in the company's stock price as investors reacted negatively to the news.

Stock Performance and Investor Reactions

Following the announcement of the discrepancies in its financial reporting, Bitfarms' stock price experienced a considerable decline, falling by approximately 6.07% to close at $2.01 per share. This downturn underscores the financial impact of the filing and reported misrepresentations on investor confidence and market perception.

Pomerantz LLP's Role in Pursuing Class Action

Established more than 85 years ago, Pomerantz LLP is recognized as a leader in securities class action cases. The firm was founded by Abraham L. Pomerantz, often referred to as the dean of the class action bar, establishing a legacy of advocating for investors' rights against securities fraud and corporate misconduct. To date, Pomerantz LLP has recovered substantial financial damages for class members in various lawsuits.

For investors who believe they have been financially harmed by Bitfarms' alleged misconduct, the class action presents an opportunity to seek justice and recover losses incurred during the Class Period. The firm encourages eligible parties to engage with its legal team to discuss the possibility of joining this critical action against Bitfarms Ltd.