Bit Digital, the BTC block reward mining firm facing fraud charges in New York, has announced changes to its management. The firm has now changed its CEO, chairwoman and strategy officer as it braces itself for a legal battle with investors.
“The Company’s Board of Directors accepted the resignation of Ping Liu as Chairwoman of the Board, as she resigned for personal health reasons,” the announcement read. In her place, the company has appointed Zhaohui Deng, formerly an independent director, as the new chair.
Min Hu, the embattled CEO, was also removed as “he was not participating in the Company’s bitcoin mining operations.” The board replaced him with Erke Huang, the current chief financial officer of the New York firm who will take over in an interim capacity.
Really makes me wonder what $BTBT's Min Hu was doing. Growing heirloom tomatoes? Perfecting his backstroke? "The Board removed Min Hu as Chief Executive Officer, as he was not participating in the Company’s bitcoin mining operations."
— J Capital (@JCap_Research) February 3, 2021
Hong Yu, the former chief strategy officer stepped down as well. “Mr. Yu decided it was in the Company’s best interests for him to pursue his other opportunities,” the announcement claimed.
In its restructuring efforts, Bit Digital has engaged two “senior corporate strategy consultants” in the U.S. to provide guidance moving forward.
The executive restructuring comes following a class action lawsuit against the firm days ago. As CoinGeek reported, the lawsuit was filed by aggrieved investors at the Southern District of New York who purchased shares between December 21, 2020 and January 8, 2021. They took to court after a report by J Capital Research exposed the alleged lies and market manipulation the firm has been engaging in for years.
The research firm revealed that Bit Digital had misrepresented its block reward mining capacity, and in some cases, told outright lies. For instance, it claimed to operate over 40,000 ASIC miners in China, which the research firm found to be grossly exaggerated. It also claimed to have purchased more ASIC miners in Q4 last year worth close to $20 million. This was an outright lie, J Capital alleges, citing the ASIC manufacturer whom Bit Digital had claimed to have purchased the miners from.
Once J Capital published the report, Bit Digital shares dropped 25%.
The investors want Bit Digital to compensate them for the damages they suffered, including interest thereon. They also want to be compensated for the costs and expenses they incurred in their legal actions, including counsel fees.
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