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Hut 8 (NASDAQ: $HUT) has agreed to pay $2.35 million U.S. to settle a class action lawsuit related to its 2023 merger with U.S. Bitcoin Corp.

The investor lawsuit alleged that Hut 8 misled investors in connection with the all-stock merger that was finalized in November 2023.

Investors claim that Hut 8, which has pivoted to artificial intelligence (A.I.) data centres, overstated the transaction's benefits while failing to disclose energy curtailment and internet connectivity issues.

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The lawsuit gained traction after short seller J Capital Research published a critical report in January 2024, prompting a slide of more than 23% in Hut 8's share price.

According to a court filing, the $2.35 million U.S. settlement represents 20% of the maximum damages that could have been levied against Hut 8 in a legal verdict against the company.

As part of the settlement, Hut 8 denies any wrongdoing or liability. The plaintiffs in the case are not able to refile their lawsuit at a later date. 

HUT stock has risen 662% over the past 12 months to trade at $121.04 U.S. per share.