Credit: lhabum/Adobe StockInvestor Sues in New York to Block $175M Bitcoin Merger
“As the industry matures and more crypto mergers and acquisitions occurs, the boards and leaders of crypto companies will need to prioritize higher standards of rigorous disclosure and good corporate governance," said Mike Katz, a partner at Manatt, Phelps & Phillips. "Such efforts will be essential in avoiding lawsuits and enabling successful exits.”
February 07, 2025 at 03:40 PM
3 minute read
What You Need to Know
- An investor sued in a New York state court to block the proposed $175 million merger between two Bitcoin companies, Stronghold Digital Mining Inc. and Bitfarms Ltd.
- The plaintiff claimed that the defendants failed to disclose in a form filed with the SEC certain internal projections for Stronghold and Bitfarms and other financial and conflict-related information.
- An expert said the complaint "underscores the critical importance of transparency and clear communication to stockholders in corporate mergers."
A shareholder filed a complaint in a New York state court challenging the proposed $175 million merger between two Bitcoin companies, Stronghold Digital Mining Inc. and Bitfarms Ltd., with a collective market cap of over $1 billion, ahead of a stockholder vote at the end of February.
Mike Katz, a partner at Manatt, Phelps & Phillips in the New York law firm's financial services group, is an expert who is not involved in the matter. Katz said that as the federal regulatory environment improves and the digital asset world moves beyond the fear of regulation by enforcement, industry will also need to improve its disclosure and corporate governance practices.
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