Bitfarms Faces Lawsuit After Restating 2022-2023 Financials, Share Price Drops 6%

Bitcoin mining firm Bitfarms is currently facing a proposed investor class action lawsuit following its disclosure of plans to restate its 2022 and 2023 financial results. The lawsuit alleges that the company improperly accounted for capital raising transactions and misled shareholders regarding its financial health.

The complaint, filed on Monday, asserts that Bitfarms failed to maintain adequate internal controls over financial reporting. As a result, proceeds from digital asset sales were incorrectly recorded as operating cash flow instead of investing cash flow. Additionally, the firm is accused of overstating its remediation efforts related to a material weakness tied to warrant transactions.

On December 9, Bitfarms announced errors in its consolidated financial statements for both 2022 and 2023. The company explained that an SEC review revealed that proceeds from digital asset sales should have been classified under investing activities. Furthermore, Bitfarms identified an error in its accounting for warrant redemptions in 2023.

Investors responded swiftly to the restatement announcement, with Bitfarms' share price falling 6% to close at $2.1 on December 10. Analysts caution that restating financials can erode market trust and invite further regulatory scrutiny. Bitfarms operates a network of mining farms that secure the Bitcoin blockchain and has experienced rapid expansion in recent years. However, the company has also faced challenges due to volatile cryptocurrency prices and rising energy costs. The decision to revise past financial statements could further undermine confidence in its management.

The class action lawsuit covers individuals who purchased Bitfarms securities between March 21, 2023, and December 9, 2024. Shareholders who wish to serve as lead plaintiff must file with the court by July 8, 2025. Even those who do not take a formal role in the lawsuit can still share in any recovery. Absent class members preserve their rights without actively participating in court proceedings.