BitGo investors have until Aug 7 to lead securities class action

BitGo Holdings faces a securities class action alleging its January IPO documents misled investors about the risk of falling crypto prices.

"The IPO documents understated the scope and severity of the risk that declining digital asset prices posed to BitGo's business," the complaint filed by Pomerantz LLP said.

BitGo sold 11.8 million shares at $18 each in its Jan 22 IPO, raising $187.6 million. On March 26, the company reported a net loss of $14.8 million for 2025, reversing a $156.6 million profit in 2024. The stock fell 15.7 percent to $7.67. On May 13, BitGo posted a $60.7 million net loss for the first quarter, and shares dropped another 17.2 percent.

The lawsuit covers investors who bought BitGo shares in the IPO or between Jan 22, 2025 and May 13, 2026. Investors have until Aug 7 to seek lead plaintiff status. The stock closed at $9.86 on May 14, 45 percent below the $18 IPO price.

The complaint alleges violations of Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. BitGo operates as a digital asset infrastructure platform offering custody, trading and staking services, with revenue tied to crypto market conditions.

The company reports revenue in two main segments: Digital Asset Sales, derived from trading volume, and Staking, which generates rewards from blockchain protocols. BitGo's March 26 earnings call revealed a quarterly margin of 0.21 percent in Digital Asset Sales, down from 0.47 percent a year earlier. The company attributed the decline to a challenging macroeconomic environment and declining digital asset prices.

The lawsuit was filed in the United States District Court for the Eastern District of New York under docket 26-cv-03428. Rosen Law Firm also reminded investors of the Aug 7 lead plaintiff deadline in a separate notice. BitGo, which trades on the New York Stock Exchange under ticker BTGO, went public as one of the first crypto custody firms to list via a traditional IPO.

The complaint specifically alleges that the registration statement and prospectus filed with the SEC contained untrue statements of material fact and failed to disclose information required by securities regulations. The Offering Documents were negligently prepared and not in accordance with governing rules, the lawsuit claims.

BitGo's financial performance is closely tied to digital asset prices, which have experienced significant volatility since the company's IPO. The company's Bitcoin treasury and trading revenue both face direct exposure to market downturns, a risk the lawsuit says was not adequately disclosed to investors.

The lawsuit adds legal overhang to a stock trading well below its IPO price. BitGo's next quarterly report, due in August, will test whether the company can stabilize revenue as digital asset markets remain volatile.

This article is for informational purposes only and does not constitute investment advice.