IREN, formerly Iris Energy, was sued by a group of investors, claiming the crypto mining firm misled them about its high-performance computing (HPC) business.
A class-action suit led by Paul Williams-Israel filed in a New York federal court on Oct. 7 claimed IRENâs Childress, Texas, facility was framed as an HPC-ready data center when it wasnât, and its computing capacity was significantly overstated.
The suit claimed the misleading information came from a June 2023 IREN statement announcing an expansion of its Childress site and a ârevitalizationâ of its HPC strategy.
âThe statement was materially false and misleading at the time it was made because it overstated the Companyâs prospects in HPC, considering that its Childress site is ill-equipped to be used for data centers and HPC,â the complaint alleged.
Williams-Israel said that he and others may not have invested in IREN if they were aware IRENâs price was, as they claimed, âartificially and falsely inflatedâ by the allegedly misleading information.
IRENâs co-founders and co-CEOs â brothers Daniel and William Roberts â and the firmâs chief financial officer Belinda Nucifora were also named as defendants in the suit.
Excerpt from Williams-Israelâs class action complaint against IREN. Source: CourtListener
Williams-Israel also claimed IRENâs âprovenâ air cooling design aimed at preventing the Childress HPC center from overheating wasnât tested properly.
The suit referred to a July 11 report from short-selling firm Culper Research, which claimed IRENâs air cooling design had only been tested in British Columbia, Canada â not Texas â where temperatures are â20 to 40 degrees [Fahrenheit] hotter year-round.â
Culper â which disclosed its short-selling position on IREN in the report â also accused the firm of talking âbig gameâ about its plans to compete in the HPC space despite investing far less than what is required.
âTo analogize, IREN claims that itâs set to win the Monaco Grand Prix, but just arrived to the track in a Toyota Prius.â
The suit is seeking to recover compensable damages caused by IREN, the Roberts brothers and Nucifora in amount to be determined at a jury trial.
IREN did not immediately respond to a request for comment.
IRENâs share price fell 6.71% on Oct. 9 to $7.51 and was flat in after-hours trading, Google Finance data shows.
IRENâs change in share price on Oct. 9. Source: Google Finance
However, its share price is up 10.44% year to date.
IRENâs market cap sits at $1.42 billion â the seventh largest among Bitcoin miners, according to Companies Market Cap.
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