Bitcoin Miner Northern Data Rejects Manipulation Allegations
Bitcoin Miner Northern Data Rejects Manipulation Allegations
“We are confident that we will clarify the matter in full cooperation with the authorities,” the company said in a statement on its website late Tuesday.
Frankfurt prosecutors confirmed on Monday that they received a criminal complaint from financial regulator BaFin asking for an investigation in connection with an allegedly misleading ad-hoc statement by Northern Data in November 2019.
Since the allegations first surfaced on Oct. 1, Northern Data’s stock has dropped 30%. The shares were down 5.7% at 10:51 a.m. in Frankfurt, valuing the company at 973 million euros ($1.12 billion).
The issue relates to the company’s acquisition of Whinstone US Inc. and “whether the expectations expressed about this transaction were adequate,” the company said.
At the time, Northern Bitcoin -- as the company was then called -- used its own shares to purchase Whinstone, which operates the world’s largest bitcoin mining site in Texas.
Shares of Northern Bitcoin traded at about 11 euros prior to the deal announcement, valuing Whinstone at 40 million euros, according to calculations by Bloomberg News. The combined company sold the former Whinstone unit in April for about 550 million euros.
Concerns over its disclosure aren’t new. Northern Data faced criticism on social media over its forecasts, revenue and allegedly unrealistic assumptions tied to Whinstone in mid-2020.
©2021 Bloomberg L.P.