- Bitcoin mining maker Canaan is being sued by a stockholder.
- The investor claims the company violated securities laws by issuing false and misleading statements about its business.
- After a brief pump last month, Canaan’s stock price has plunged to half its value.
Cayman Islands-registered Canaan was touted as one of the world’s largest manufacturers of the ASIC devices used to mine cryptocurrency. Now it is being sued by one of its stockholders for violating US security laws, after its share price tumbled from $9 to around $4.70, despite a brief unexplained surge in CAN in mid-February.
On Wednesday, Phillippe Lemieux, an investor in Canaan, filed a class-action lawsuit against the company in an Oregon court. The suit alleges that Canaan had issued a slew of false and misleading statements to make its financial health appear better than it was while hiding information that might have been pertinent to investors. Lemieux is seeking yet unspecified “compensable damages” as a result of the alleged violation of securities laws.
Canaan filed its intentions to go public with the US Securities and Exchange Commission on Oct. 28. It went on to list on Nasdaq under the ticker name CAN. Though it raised only $90 million of its intended $400 million target, the listing was big news for the crypto space.
According to the lawsuit, Lemieux purchased 200 shares of CAN on Feb. 12 at $8.50 apiece near the stock’s all-time high. Citing at length a blog post titled “Canaan Fodder”published by short seller Marcus Aurelius (MAV), the complaint stated that Canaan misled investors in its IPO filing.
The MAV post unearths disturbing details of Canaan’s listing and notes that Canaan had three previous unsuccessful listing attempts on Asian exchanges since 2016. MAV…