Stronghold Leaders Allegedly Allowed Crypto Mining Misstatements

Officers and directors of Stronghold Digital Mining Inc. led the cryptocurrency mining company into a 75% stock decline by overstating its production capacity before its initial public offering, a shareholder says in a new derivative suit.

Stronghold was harmed by having to pay the leaders millions of dollars in compensation, taking a $12.2 million impairment charge, losing market capital, and having to defend a proposed securities class action, investor Cristian Navarro says on behalf of the company. He filed his suit Sept. 15 in the US District Court for the Southern District of New York.

“The allegations in the complaint ...