Iris Energy, which is now known as IREN, has been thrown into a class action lawsuit alleging that the crypto miner lied about its mining capabilities.
The lawsuit alleges that the world-famous crypto miner misled investors about its potential and capabilities. The company recently changed its image to that of a high-performance computing (HPC) data center operator. However, it has failed to prove its HPC capacity as of now.
IREN’s Texas Facility Misses HPC Mark
The lawsuit dictates that Iris Energy or IREN and its management misrepresented the company’s capacity to convert its facilities from Bitcoin mining to HPC and artificial intelligence applications.
The complaint claims that crucial components required for these processes are absent from Iris Energy’s Childress Texas facility, which the firm marketed as a major asset for its HPC strategy. According to the lawsuit, the location lacks sufficient cooling systems, fiber connectivity, and power redundancy.
Bitcoin miners in Texas are already undergoing disputes and today’s lawsuit against IREN adds to the long list of probes miners that these miners are already going through. Previously, sector giant Marathon Digital had been served with a lawsuit over the excessive noise from Bitcoin mining facilities in Texas.
Belinda Nucifora, the company’s chief financial officer, and Daniel and William Roberts, the co-founders and co-CEOs of Iris, are named as defendants in the action.
The lawsuit also bases its argument that the air cooling design for the HPC facility that the company claims to have installed had not even been tested in Texas but British Columbia.
Iris Lawsuit Comes Amid Bitcoin Miners Facing Industry Pressure
Bitcoin miners across the globe have been facing a drop in revenue. The halving, that was supposed to give the market a boost has made it difficult to make money out of the mining business. Bloomberg in one of its previous reports said that the difficulty to mine Bitcoin has surged to a record high.
Mining difficulty increased by 3.5% back in September making it an all-time high. With a consistent upward trend over time, the measure often reflects predictions for directional price movements. Following a software code change in April known as the halving, which reduced by half the potential revenue available to miners and put pressure on many of the companies’ margins.
The lawsuit on IREN has come at a time when these mining difficulties have already grappled the industry with a tough time.