Bitcoin Miner Iris Energy Faces Class-Action Lawsuit Alleging Overstated Capabilities
Bitcoin miner Iris Energy is under scrutiny as a class-action lawsuit alleges that the Australian Bitcoin Mining company overstated its computing capabilities and misled investors about its prospects in high-performance computing (HPC).
Details of the Lawsuit
The lawsuit, filed in the Eastern District of New York on October 7, seeks to represent shareholders who purchased IREN securities between June 20, 2023, and July 11, 2024. Led by investor Paul Williams-Israel, the lawsuit claims that IREN misrepresented its ability to transition from Bitcoin mining to HPC, alleging that the company’s Data centers were inadequate for such operations.
The lawsuit alleges that the miner's Childress, Texas site lacked the necessary infrastructure for HPC, including backup power supplies and proper cooling systems, and that the company misled investors by promoting the facility as HPC-ready. It further states that Iris Energy made "materially false and misleading" claims about its capabilities.
Despite these allegations, Iris Energy has yet to respond to requests for comment from Decrypt, the source said.
Facility Concerns and Insider Activity
The lawsuit claims that the facility had only a single power transmission line, with no backup power supply, making it unsuitable for the continuous operations required in HPC environments. The complaint names Iris Energy’s co-founders, Daniel and William Roberts, and chief financial officer Belinda Nucifora as defendants.
In addition to infrastructure concerns, the lawsuit points to insider activity as a major red flag. Both Daniel and William Roberts began selling off their shares in early 2024, not long before the company publicly announced its pivot to HPC.
Implications for Iris Energy
The lawsuit raises questions about Iris Energy’s ability to compete effectively in the high-performance computing Market. Expert analysis from Culper Research, cited in the lawsuit, reveals that Iris Energy spent significantly less than industry standards for building its data centers, casting doubt on its HPC capabilities.
The lawsuit seeks damages for investors who were affected by the alleged violations of federal securities laws. Iris Energy has not yet commented on the lawsuit, but it is expected to proceed in the coming months.
Edited by Stacy Elliott.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos, and more.
