Bitcoin ( BTC ) miner Hut 8 Corp. share price tumbled more than 23% on Jan. 18, the same day the firm rang the Nasdaq’s opening bell and another spread an unverified report alleging insiders are preparing to dump its stock.

Hut’s share price fell from $9.30 to as low as $7.10 in after-hours trading. The sell-off began around the same time as activist short-selling firm JCapital Research released a report titled “The Coming HUT Pump and Dump” which claimed that the firm’s Nov. 30 merger with fellow Bitcoin miner U.S. Bitcoin Corp (USBTC) could be placing Hut 8 investors in harm’s way.

Bitcoin miner Hut 8 shares tank 23% amid accusations from short-sellers image 0 Hut 8’s share price tumbled on Jan, 18. Source: TradingView

JCapital Research— which admits to being short-side biased on its website — took aim at the recent $725 million merger deal, claiming that USBTC had a history of “legal trouble” and that the majority of the recently merged Bitcoin miner’s shares are held by an “undisclosed related party.”

“We uncover that USBTC is backed by promoters with a history of legal trouble. In its short existence, USBTC appears to have defaulted on a loan and paid two government fines, one for committing securities violations,” JCapital wrote.

Additionally, JCapital claimed that USBTC’s CEO Michael Ho — now Hut’s chief strategy officer — hid his relationship with stock promoters called the Honig Group, which was accused by the SEC in 2019 of engaging in “classic pump and dump” and “fraudulent schemes.” Honig Group settled the charges and agreed to be banned from trading penny stocks.

“Ultimately, we strongly believe that [HUT} shareholders are likely to feel the pain of being on the wrong side of an over-levered pump-and-dump, only to be left holding the most inefficient Bitcoin miner, which is unprofitable even at a Bitcoin price of over $60,000,” the report concluded.

"There's no way to verify the short report,” a Crypto X user, Cantonese Cat, remarked in a Jan. 18 post. "Many are selling out of panic. It could be real, it could be panic.”

Cointelegraph reached out to JCapital to verify the claims made and also reached out to Hut 8 for comment on the accusations.

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The report arrived on the same day that Hut CEO Jaime Leverton rang the opening bell at the Nasdaq Headquarters in New York, something the firm said was conducted to “celebrate the completion of its all-stock merger” between it and the U.S. Data Mining Group, and USBTC.

We’re live at the @nasdaq headquarters in New York getting ready to ring the Opening Bell to celebrate the completion of our merger alongside the Hut 8 Corp. team and Board of Directors! Watch the livestream from 9:15am to 9:30am ET here https://t.co/DzzbDIjCb8 . pic.twitter.com/RHaLJDer0o

— Hut 8 (@Hut8Corp) January 18, 2024

Unlike many crypto miners forced to sell at least part of their mined Bitcoin holdings due to market headwinds, including firms such as Core Scientific and Riot Blockchain, Hut 8 has continued to increase its self-mined Bitcoin stash.

In a Jan. 5 statement, Hut reported that it had mined 453 Bitcoin in December, bringing its reserves to a total of 9,195 BTC — worth $377 million at current prices.