IREN (formerly known as Iris Energy) is being sued by a group of investors, accusing it of misleading investors about its high-performance computing (HPC) business, Cointelegraph reported. The class action lawsuit, filed Oct. 7 in New York federal court by Paul Williams-Israel, alleges that IREN's Childress, Texas, facility was described as an HPC data center when it was not and that its computing capabilities were significantly overstated.

The lawsuit alleges that the misleading information came from IREN’s June 2023 statement announcing the expansion of the Childress site and a “revitalization” of its HPC strategy. Williams-Israel said he and others might not have invested if they had known IREN’s price was “artificially inflated” by the misleading information.

IREN's co-founders and co-CEOs, brothers Daniel and William Roberts, and chief financial officer Belinda Nucifora are also named as defendants. Williams-Israel also claims that IREN's air cooling design was not adequately tested in Texas' hot temperatures.

The lawsuit cites a July 11 report from short-selling firm Culper Research that says IREN's air-cooling design was only tested in Canada, not Texas. Culper also accuses IREN of underinvesting in the HPC space. The lawsuit seeks damages to be determined by a jury trial.

IREN’s stock price fell 6.71% to $7.51 on Oct. 9 and was flat in after-hours trading. Year-to-date, IREN stock is up 10.44% and has a market cap of $1.42 billion, making it the seventh-largest Bitcoin miner.