Canaan Inc. Triumphs in Stock Fraud Lawsuit Filed by Investors
Canaan Inc., a prominent blockchain server and bitcoin mining equipment company, has emerged victorious in a proposed class action lawsuit. Investors alleged that the company had misled them about the demand for its cryptocurrency mining equipment. The US District Court for the Southern District of New York dismissed the lawsuit on Monday, stating that investors failed to prove that the company’s statements were materially false, made with the necessary level of intent, or subject to legal claims.
Blockchain computing and hardware companies have faced multiple investor suits in recent years. In January, the Southern District of New York ruled that CleanSpark Inc. investors had adequately alleged misrepresentations related to the company’s shift from alternative energy. In the case of Canaan Inc., investors may still seek permission to amend their complaint and try again.
This is not the first time Canaan has been sued by investors. In 2020, an investor filed a class-action lawsuit in the United States District Court for The District of Oregon, claiming that the company violated US securities laws by misleading investors about its financial health and operational status through its Securities and Exchange Commission (SEC) filings. The plaintiff alleged that Canaan concealed information about the company’s financial health and failed to disclose the removal of numerous distributors from its website before its IPO.
Canaan went public on Nasdaq in November 2020, raising only $90 million on opening after a key underwriter, Credit Suisse Group AG, backed out. Despite these legal challenges, the company continues to operate in the rapidly growing cryptocurrency mining equipment market.