Argo, the debt-ridden blockchain has been struck with a class action lawsuit for allegedly misleading investors during its initial public offering (IPO) in 2021. The lawsuit comes in the backdrop of Argo blockchain's share price having tumbled down by 98 percent in recent days. At the time of the IPO, Argo had offered its shares at the price of $15 (roughly Rs. 1,222) and now, its price stands at $0.2 (roughly Rs. 16). This marks a 98 percent drop in its share prices.
The Argo blockchain had churned around $105 million (roughly Rs. 856 crore) at the time of its IPO. Argo had released 7.5 million ADS tokens, with each token priced $15 (roughly Rs. 1,222).
In a lawsuit, early investors of the Argo blockchain said that the developers behind this platform hid important information, like its struggle with risen electricity charges, from them.
“The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing their preparation,” the filing said.
In December last year, Argo Blockchain had announced the sale of its mining facility, based in Texas' Dickens County for $65 million (roughly Rs. 540 crore).
The mining company will be using the funds from this sale to initiate and complete the repayments of the pending loans.
In the last seven months, the global crypto industry lost over $200 billion (roughly Rs.16,32,270 crore) owing to market volatility, low risk appetite among investors, hacks, as well as downfalls of promising projects.
While several crypto-related firms filed for bankruptcies or laid-off their staff members, the crypto mining industry also suffered severely.
As per a Bloomberg report, Bitcoin miners lost over $1 billion (roughly Rs. 8,200 crore) during the recent crypto crash.
For now, the unfolding of this lawsuit is slated for the weeks to come.
Argo blockchain has not yet commented on the subject.