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The Bitcoin and digital asset mining firm Hut 8 responded to a recent critical report in a statement on Jan. 19.

The mining company wrote:

“Hut 8 Corp is aware of a short report … by J Capital Research, which is a self-proclaimed group of biased activists who clearly disclose that they will profit if a company’s share price declines.”

J Capital’s report in part criticized Hut 8’s recent merger with U.S. Bitcoin Corp (USBTC). It suggested that the agreement resulted from a “failed merger process” in which no other party was interested in merging with either company.

Without directly mentioning that section of the report, Hut 8 responded by stating said that its board has “confidence in the merger of equals.” Hut 8 added that the board has confidence in the company’s balance sheet and future success.

Hut 8 did not address any other points in J Capital’s report but said that it is reviewing the article and will provide more information as needed.

Report criticized both USBTC and Hut 8

J Capital’s original report alleged questionable activity including an “undisclosed related party,​ ​a stock-promoter cabal, and a host of left-for-dead assets.”

Largely concerning USBTC rather than Hut 8, J Capital alleged connections to two stock promoter groups: Honig group and the DesLauriers twins. It further suggested a history of corruption in one USBTC-turned-Hut 8 executive.

J Capital added that USBTC’s core asset — part of a Texas-based mining facility that it purchased from a bankrupt company called Compute North — has failed to deliver the energy and internet connectivity needed for crypto mining.

J Capital asserted that USBTC would have entered a structured bankruptcy without the merger and said that USBTC’s true value may be 70% less than believed. It warned of upcoming USBTC stock dilution through an expected $200 million fundraiser; it also believes that insiders may soon sell shares for other reasons.

Regarding Hut 8, J Capital highlighted the company’s suspended North Bay mining facility and past sanctions against the company’s former auditor, among other concerns. It also highlighted Hut 8’s listing on a TSX Venture board called NEX, which it suggests hosts frauds and scams; NEX’s own site states that it is aimed at firms below TSX Venture’s listing standards.

The Schall Law Firm separately announced an investigation into Hut 8 on Jan. 19. This was prompted by the report and could lead to a class action lawsuit.

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