Bitcoin mining company on Nasdaq Bit digital (BTBT) denied fraud allegations against the company, which were made in a recent report by J Capital Research.
Without specifically naming the report, a Press release the mining company responded to “false allegations” about its business. It reiterated its third quarter 2020 financial statements on the size and scope of its business, noting that “an overview of our bitcoin mining operations” is publicly available on the US Securities and Exchange Commission (SEC) website.
Among other things the report from J Capital, Bit Digital called the documents that showed it operates nearly 23,000 Bitcoin mining machines in China “just a lie”.
In December, Bit Digital announced a $ 13.9 million agreement to purchase nearly 18,000 Whatsminer and Antminer ASICs. Whatsminer maker MicroBT did not respond to a request for comment from CoinDesk.
J Capital also called Bit Digital a “bogus Bitcoin deal” and claimed to have confirmed with local Chinese government officials that Bit Digital has “no bitcoin miners” there, casting doubts about the legitimacy of its Asia-based mining operations in China leaves.
According to Bit Digital, all mining operations in mainland China are managed by XMAX Hong Kong and all “utility bills and other charges” are paid to suppliers in Hong Kong.
The company’s shares rose over 400% between December 28, 2020 and January 4, 2021, peaking above $ 32 and bringing the company above a market value of $ 1 billion. J Capital released its report a week later on January 11th. Since then, Bit Digital stocks have fallen over 35% to around $ 16.
Bit Digital did not reply to any of CoinDesk’s emails and looked for a comment. CoinDesk was also unable to contact facility managers at Bit Digital’s Asia-based mining operations.
However, the company is also digging in the US. In Texas and Nebraska, Bit Digital owns a total of 2,100 machines in facilities managed by Minnesota-based mining infrastructure company Compute North.
Dave Perrill, CEO of Compute North, told CoinDesk that his company has always had a “very healthy partnership” with Bit Digital, confirming the 2,000 machines in Nebraska and 100 in Texas that his company manages.
On a phone call, Perrill said his team was also “in talks about significantly scaling their operations” with Bit Digital. He said he couldn’t speak to his client’s Asian mining facilities.
Bit Digital started mining Bitcoin in February 2020.