Crypto Mining Firm IREN Faces Class-Action Lawsuit Over Misleading HPC Claims

According to Cointelegraph, IREN, formerly known as Iris Energy, is facing a class-action lawsuit filed by a group of investors. The lawsuit, led by Paul Williams-Israel, was filed in a New York federal court on October 7. The plaintiffs allege that IREN misled investors about the capabilities of its high-performance computing (HPC) business, particularly regarding its Childress, Texas facility. The facility was purported to be an HPC-ready data center, but the lawsuit claims this was not the case and that the computing capacity was significantly overstated. The lawsuit points to a June 2023 statement from IREN, which announced an expansion of its Childress site and a revitalization of its HPC strategy. The plaintiffs argue that this statement was materially false and misleading, as the Childress site was not adequately equipped for data centers and HPC. Williams-Israel and other investors claim they might not have invested in IREN had they known the true state of the company's capabilities, alleging that the company's stock price was artificially inflated by the misleading information. Named as defendants in the lawsuit are IREN’s co-founders and co-CEOs, Daniel and William Roberts, as well as the firm’s chief financial officer, Belinda Nucifora. The complaint also highlights a July 11 report from short-selling firm Culper Research, which criticized IREN’s air cooling design for the Childress HPC center. The report claimed that the design had only been tested in British Columbia, Canada, and not in Texas, where temperatures are significantly higher. Culper Research, which disclosed its short-selling position on IREN, accused the firm of making grand claims about its HPC ambitions while investing insufficiently. The lawsuit seeks compensable damages from IREN, the Roberts brothers, and Nucifora, with the amount to be determined at a jury trial. IREN has not yet responded to requests for comment. Following the news, IREN’s share price fell by 6.71% on October 9 to $7.51, though it remained flat in after-hours trading. Despite this, the company's share price is up 10.44% year to date, and its market capitalization stands at $1.42 billion, making it the seventh largest among Bitcoin miners.