Pomerantz Law Firm Initiates Class Action Lawsuit Against Bitfarms Ltd. for Securities Violations and Misconduct

Class Action Lawsuit Filed Against Bitfarms Ltd.

On June 7, 2025, Pomerantz LLP, a leading law firm recognized for its work in corporate and securities class litigation, announced the initiation of a class action lawsuit against Bitfarms Ltd. (NASDAQ: BITF) and certain key company officers. This legal action was filed in the United States District Court for the Eastern District of New York. The suit is categorized under case number 25-cv-02630 and represents a class of individuals and entities that purchased Bitfarms securities between March 21, 2023, and December 9, 2024, both dates inclusive, seeking compensation for damages stemming from alleged violations of federal securities laws.

Background of the Complaint

The lawsuit specifically targets Bitfarms, a company engaged in the operation of Bitcoin data centers across Canada, the US, Paraguay, and Argentina. As a digital asset firm, Bitfarms is primarily focused on "mining" Bitcoin, which involves validating transactions on the Bitcoin Blockchain using high-powered computers. The company typically retains its mined Bitcoin as digital assets or converts them into US dollars through various cryptocurrency trading platforms, utilizing a strategic approach that includes the sale of its Bitcoin assets to manage its finances.

However, it is alleged that during the Class Period, the company, along with certain officials, made materially false and misleading statements about their business operations and overall financial health. The suit claims that the defendants failed to disclose crucial information about the company’s internal controls and its improper accounting methods, which ultimately misled investors about the company’s true financial condition.

Key Allegations

1. Deficient Internal Controls: The complaint outlines that Bitfarms did not maintain adequate internal controls over their financial reporting processes. As a result, significant errors in accounting were made.
2. Misclassification of Financial Statements: It is alleged that Bitfarms inappropriately classified proceeds from the sale of digital assets as cash flow from operating activities rather than from investing activities, misleading investors regarding the company’s cash flow status.
3. Misrepresentation of Remediation Efforts: The lawsuit asserts that the company overstated its capability to remedy the identified material weaknesses in internal control related to the accounting for their 2021 Warrants and continued to issue misleading statements about their progress.
4. Misstatement of Financial Reports: Due to the above issues, the financial statements issued by Bitfarms were inaccurately presented to the public and are now expected to be restated. On December 9, 2024, the company disclosed that its consolidated financial statements for 2022 and 2023 contained a material error regarding the classification of proceeds from digital asset sales. This admission was met with a significant drop in the company's stock price, reflecting the lack of trust among investors.

What This Means for Affected Investors

Investors who acquired Bitfarms securities within the stated Class Period will have until July 8, 2025, to seek recognition as Lead Plaintiffs in this class action. Interested parties are encouraged to consult the full complaint available on Pomerantz's official website or directly contact Danielle Peyton at the firm for additional details or inquiries.

Pomerantz LLP: A Leader in Class Action Litigation

With a history spanning over 85 years, Pomerantz LLP has established itself as a pioneer in securities class actions. Founded by Abraham L. Pomerantz, the firm has recovered billions for clients affected by corporate malfeasance and securities fraud. The firm remains committed to advocating for the rights of its clients in complex litigations. For more information, please visit www.pomlaw.com.

Conclusion

As the case develops, it highlights the increasing scrutiny on the cryptocurrency industry and the importance of transparent financial practices. Investors are urged to stay informed regarding the proceedings and their rights within this lawsuit, particularly in the evolving landscape of digital assets and the associated legal frameworks.