Pomerantz Law Firm Files Class Action Lawsuit Against Bitfarms Ltd. for Securities Violations

Overview of the Class Action Against Bitfarms Ltd.

On July 7, 2025, Pomerantz LLP announced the launch of a class action lawsuit against Bitfarms Ltd., a prominent player in the cryptocurrency sector, particularly in Bitcoin mining. This lawsuit is filed in the United States District Court for the Eastern District of New York. Investors eligible to join this class action include all individuals and entities who acquired Bitfarms securities between March 21, 2023, and December 9, 2024. They seek restitution for damages incurred due to alleged violations of federal securities laws committed by Bitfarms and its officers. The lawsuit is registered under docket number 25-cv-02630.

Background of Bitfarms Ltd.

Founded in Canada, Bitfarms operates integrated Bitcoin data centers across Canada, the United States, Paraguay, and Argentina, focusing on the mining of Bitcoin. The company employs specialized computers, commonly called miners, that validate transactions on the Bitcoin blockchain. In their operations, Bitfarms not only retains mined Bitcoin as a digital asset but also converts it into U.S. dollars using various cryptocurrency trading platforms. The firm has been reported to be pursuing a financing strategy that includes the strategic sale of its Bitcoin assets.

Allegations in the Class Action

According to the complaint, Bitfarms allegedly misrepresented its financial health and operational efficacy throughout the class action period. Specifically, the lawsuit claims that Bitfarms had deficient internal controls related to financial reporting, leading to the misclassification of cash flows from the sale of digital assets. This misrepresentation cast a shadow over its profitability and operational viability. The lawsuit articulates that the firm incorrectly categorized proceeds from these sales as operating cash flow instead of investing cash flow, which raises significant red flags for investors.

Bitfarms is also accused of overstating its progress in remediating a material weakness identified in its internal control over financial reporting, particularly regarding the 2021 Warrants—derivatives that allow the holder the right to purchase shares at specific terms. This weakness has raised concerns about the validity of Bitfarms' previously issued financial statements, which may require restatement due to the inaccurate accounting practices highlighted in the lawsuit.

In December 2024, Bitfarms revealed that its financial statements for fiscal years 2022 and 2023 contained serious errors, particularly concerning the misclassification of cash flows from digital asset sales. This disclosure resulted in a significant drop in its stock price, indicating investor distress and loss of confidence in the company's financial reporting.

Implications for Investors

Investors who purchased Bitfarms securities during the specified class period may still be able to act. They are encouraged to file a motion by July 8, 2025, to be appointed as the Lead Plaintiff in the ongoing litigation. Those seeking to join the plaintiff class can obtain further information and necessary documents via the Pomerantz Law Firm’s website.

Closing Thoughts

Pomerantz LLP, renowned for its expertise in corporate class actions, aims to protect investors' rights in this case. The firm has a long history of pursuing securities fraud claims and securing billions in damages for investors in similar lawsuits. As the matter unfolds, Bitfarms' stakeholders are advised to stay informed on developments regarding this lawsuit and the company's remediation efforts for its financial controls. This case serves as a reminder of the critical importance of transparency and ethical reporting in corporate governance within the cryptocurrency landscape.