Bitcoin (BTC) mining firm Hut 8 announced a leadership transition, replacing its CEO weeks after “pump-and-dump” allegations against the company were published by the controversial short-selling firm JCapital Research.
On Feb. 7, the Miami-based mining company published a press release saying that its former CEO Jaime Leverton will depart from his position. Asher Genoot, the president and a member of the company’s board of directors, will replace the now-former executive.
Bill Tai, Chairman of the Board of Hut 8, said in the announcement that Hut 8 is at a “pivotal inflection point” as they just completed the merger with U.S. Bitcoin Corp (USBTC). The executive added that Genoot will bring a “disciplined, proven approach” to unlock the potential of the merger.
Genoot said in the announcement that he will focus on strengthening the operations and “creating lasting shareholder value.” The executive expressed confidence in their team and said they will publish details on their near-term strategy soon.
In September 2023, Hut 8 received the final clearance from the Canadian Supreme Court to complete its merger with USBTC. Following the merger, the company boosted its BTC reserves in October amid the successful merger deal.
We have just published on $HUT. We think its merger partner is an over-valued, Honig-backed, soon-to-be bankrupt junior miner. The new combined company has the lowest efficiency rate in the industry. We think this is an obvious promote. Report at https://t.co/LtOVDtLcER
— J Capital (@JCap_Research) January 18, 2024
However, on Jan. 19, Hut 8 shares tanked after the short-selling firm JCapital Research published allegations warning Hut 8 investors of an “upcoming pump and dump.” The company claimed that the merger with fellow miner USBTC could place investors in harm’s way.
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The research firm, which admits to being short-side biased, pointed toward the $725 million merger deal and claimed that USBTC had a history of “legal trouble.” The company also highlighted in the report that the majority of the merged Bitcoin miner’s shares are being held by an “undisclosed related party.” Right after the report was published, Hut shares fell from $9.30 to $7.10.
Following the report, Hut 8 issued a blanket denial, describing the report as “misleading.” The company said that it was a “deliberate attempt to spread misinformation” and was filled with inaccurate information and misrepresented data. The company also alleged that the report was “designed for the sole purpose of negatively impacting Hut 8’s share price for the short seller’s own benefit.”
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