BitGo faces securities class action after $75.5M in losses post-IPO

BitGo Holdings Inc. faces a securities class action lawsuit after shares lost more than half their value following the company's $187.6 million initial public offering in January.

"Individual officers who sign SEC certifications bear personal responsibility for the accuracy of corporate disclosures," Joseph E. Levi, a partner at Levi & Korsinsky, said. "When a company's registration statement contains material misstatements, the individuals who authorized those documents face direct accountability under federal securities law."

The lawsuit, filed in the US District Court for the Eastern District of New York, covers investors who purchased BitGo Class A common stock in or traceable to the Jan 22 IPO at $18 per share, or bought securities between Jan 22, 2025 and May 13, 2026. BitGo reported a $14.8 million net loss for 2025 — swinging from $156.6 million in net income the prior year — and a $60.7 million net loss for the first quarter of 2026, more than double the $25.7 million loss in the year-ago period. Shares fell 15.71% to $7.67 on March 27 after the 2025 results and another 17.2% to $9.86 on May 14 after the first-quarter report.

The complaint alleges that BitGo and senior officers including Chief Executive Officer Michael Belshe, Chief Financial Officer Edward Reginelli, and Chief Revenue Officer Chen Fang made materially false statements in the IPO registration statement and subsequent disclosures. Specifically, the company projected net income from operations between $3.2 million and $3.5 million for 2025 while touting assets on platform of $104 billion as of September 2025, without disclosing that a 9% year-over-year decline to $81.6 billion was already underway. Digital Asset Sales margins fell to 0.21% from 0.47% in the prior year, the filing said.

The lead plaintiff deadline is Aug 7, 2026. Investors who purchased BitGo shares during the class period may seek appointment as lead plaintiff, though participation in any recovery does not require serving in that role. The lawsuit seeks damages under Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against the company and eight named defendants, including directors Brian Brooks, Justin Evans, Brian Murray, Sunita Parasuraman, and Vivek Pattipati.

The case adds to legal overhang for BitGo, which went public at a time when digital asset prices were already declining. The company's next quarterly report will test whether management can reverse the revenue deterioration that triggered the stock's collapse. A trial date has not yet been set.

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