Iris Energy has received a class action lawsuit regarding its IPO documents
In addition to the difficulties of a financial nature, miner Iris Energy faced a class action lawsuit that was filed in the U.S. District Court of New Jersey.
According to the documents, the company was negligent in its 2021 IPO and failed to disclose several mining machines. The equipment was allegedly owned by special purpose vehicles (SPVs) without recourse. And they, in turn, could not create a sufficient financial flow to meet the debt obligations.
Recall that there have previously been allegations from Iris Energy that the cash flow produced by the units is not enough to service the debt. Cryptocurrency mining brings in no more than $2 million, while payments require $7 million.
Now Iris has been forced to reduce capacity by 3.6 Eh/s. The company says the capacity level is about 2.4 Eh/s, taking into account installations that are waiting to be commissioned.