Lawsuit filed for Investors who lost money with Bitfarms Ltd. (NASDAQ: BITF) shares

An investor, who purchased shares of Bitfarms Ltd. (NASDAQ: BITF), filed a lawsuit over alleged violations of Federal Securities Laws by Bitfarms Ltd. in connection with certain allegedly false and misleading statements.

Investors who purchased shares of Bitfarms Ltd. (NASDAQ: BITF) have certain options and for certain investors are short and strict deadlines running. Deadline: July 8, 2025. NASDAQ: BITF investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

Toronto, Canada based Bitfarms Ltd. operates integrated bitcoin (also referred to as "BTC") data centers in Canada, the United States, Paraguay, and Argentina.
The Company primarily owns and operates data centers housing computers (referred to as "miners") designed for the purpose of validating transactions on the Bitcoin Blockchain (referred to as "mining"). Once BTC are mined, Bitfarms keeps them as digital assets or exchanges them for U.S. dollars through established cryptocurrency trading platforms. According to the Company, Bitfarms' financing strategy involves, among other things, strategically selling its BTC assets.
When Bitfarms sells its digital assets, the Company is required to account for the proceeds it receives from those sales on its cash flow statement, which provides an accounting of the cash used in operations, including working capital, financing, and investing. A company's cash flow statement generally includes three sections: (i) cash flow from investing activities, which reports how much cash has been generated or spent from investment-related activities in a specific period; (ii) cash flow from operating activities, which indicates the amount of money a company brings in from its ongoing, regular business activities, such as manufacturing and selling goods or providing a service to customers; and (iii) cash flow from financing activities, which delineates a company's financing, how it raises money, and how it pays money back by highlighting actions such as stock issuances, borrowing money, repurchasing shares, and repaying debt.

In 2021, Bitfarms Ltd. began to raise capital through, inter alia, the issuance of warrants (the "2021 Warrants")-i.e., derivatives that gives the holder the right but not the obligation to buy an underlying security at a certain price, quantity, and future time.

In March 2024, Bitfarms Ltd. identified a material weakness in its internal control over financial reporting with respect to the Company's classification of the 2021 Warrants. Specifically, the Company acknowledged that "the control over accounting for complex financing transactions did not operate effectively in 2021 as the warrants issued in 2021 should have been classified as a financial liability and accounted for at fair value through profit and loss, and not as equity instruments." However, since identifying the foregoing weakness, Bitfarms has consistently represented that it was implementing remediation efforts including "expanding the finance team to include more Chartered Professional Accountants with technical expertise and experience in evaluating more complex areas of [International Financial Reporting Standards] Accounting Standards," "involving the Company's legal counsel on evaluating complex agreements involving financial instruments," and "engaging third-party consultants to assist with assessing the accounting for complex financial instruments and review of financial statements." Further, the Company has consistently stated that "its remediation plan is expected to be completed during 2024."

On December 9, 2024, Bitfarms issued a press release announcing that its consolidated financial statements for the fiscal years 2022 and 2023 contained a material error related to the classification of proceeds from digital asset sales and would need to be restated. Specifically, the Company revealed that "Bitfarms previously categorized proceeds derived from the sale of digital assets as a cash flow from operating activities. In conjunction with the [United States Securities and Exchange Commission ("SEC")] review, it was determined that proceeds from the sale of digital assets should be classified as cash flow from investing activities." Additionally, Bitfarms stated that it was also restating its financials "to adjust for an error in the accounting for the redemption of warrants in 2023."

Then, on April 1, 2025, Bitfarms filed its Annual Report on Form 40-F with the SEC, reporting the Company's financial and operating results for the year ended December 31, 2024 (the "2024 40-F"). Bitfarms Ltd. (NASDAQ: BITF) reported that its annual Total Revenue rose from $146.36 million in 2023 to $192.88 million in 2024, and that its Net Loss declined from $108.92 million in 2023 to $54.06 million in 2024. With respect to the Company's accounting for the 2021 Warrants, the 2020 40-F reiterated Bitfarms' purported efforts to remediate the previously announced material weakness but revealed that "its remediation plan is expected to be completed after review and testing of controls during 2025," contrary to its prior representations that the remediation plan would be completed in 2024.

Shares of Bitfarms Ltd. (NASDAQ: BITF) declined from $3.91 per share on February 27, 2024, to as low as $0.673 per share on April 09, 2025.

The plaintiff claims that between March 21, 2023 and December 9, 2024, the Defendants made false and/or misleading statements and/or failed to disclose that Bitfarms maintained deficient internal controls over financial reporting, that as a result, the Company incorrectly categorized proceeds derived from the sale of digital assets as a cash flow from operating activities rather than as a cash flow from investing activities, that in addition, the Company overstated the extent to which it had remediated, and/or its ability to remediate, the material weakness in its internal controls over financial reporting related to its classification of the 2021 Warrants, that the foregoing errors caused Bitfarms to misstate various items in several of the Company's previously issued financial statements, that as a result, these financial statements were inaccurate and would likely need to be restated, and that as a result, the Company's public statements were materially false and misleading at all relevant times.

Those who purchased shares of Bitfarms Ltd. (NASDAQ: BITF) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.