Short selling outfit J Capital has alleged that Bit Digital — one of the world’s largest Bitcoin mining stocks — is actually a ruse designed to swindle US investors.
In a 20-plus page report, J Capital says Bit Digital’s crypto operations are “completely fraudulent,” having interviewed chipset manufacturers Bitmain and MicroBT to find they’d never heard of the company.
J Capital says it even spoke to local governments in regions where Bit Digital claims to have been housing BTC miners before it moved from China to the US — with none of them able to confirm Bit Digital’s existence.
The crew’s allegations extend beyond phony Bitcoin miners. J Capital says Bit Digital previously directed millions of dollars worth of theft via peer-to-peer lending schemes long before its switch to crypto.
A day later, Bit Digital issued a statement indirectly rebuffing some of the report, and touted $80 million worth of fresh cash raised from an unnamed institutional investor.
“[BitDigital] will continue to exexute its stragety to rebalancing its utility cost structure and asset allocation in seek of the best utility use to produce more Bitcoin,” reads Bit Digital’s press release, which is riddled with spelling errors.
- BitDigital says it had 40,865 miners wielding 2.25 EH/s as of Dec 19, 2020.
- Last month, the firm had mined 1331.2 BTC in total — worth $38 million then and $51 million now.
- The miners are installed in Nebraska and Texas.
- BitDigital says Huobi.pool and AntPool can verify its Bitcoin output.
“Management believes that our Bitcoin mining business is performing well and the stragegy is correct.”
Bit Digital — formerly a car rental firm called Golden Bull — is indeed one of the largest Bitcoin mining stocks in the world right now.
In fact, Bit Digital received a fresh batch of industry exposure for hitting $1 billion market value earlier this week, rendering J Capital’s allegations extra juicy.
[Read more: Chinese lottery bets $14M on Bitcoin mining]
Bit Digital stock is down more than 20% since before the report was published, but shows signs of recovery during pre-market trade on Thursday.
Protos has reached out to Bit Digital, Huobi.pool, and AntPool to learn more, and we’ll update this piece should we hear back.