Shares of Chinese bitcoin mining machine manufacturer Ebang fell sharply on Tuesday following a report from Hindenburg Capital that claims the firm misled investors about investment allocations.

The lengthy report alleges that of the roughly $375 million the mining machine manufacturer raised from investors since going public in June 2020, some $103 million went toward “bond purchases linked to its U.S. underwriter.”

Shares of Ebang were down over 15% on the news.

The report also claims the company “directed $21 million to repay related-party loans to Ebang Chairman/CEO Dong Hu’s relative.” Additionally, the report says the mining machine business is faltering, only producing 6,000 machines in the first half of 2020.

To shore up its mining business (or, as Hindenburg put it, to “pivot the story”), Ebang launched a cryptocurrency exchange called Ebonex Monday.

Ebang did not respond to CoinDesk’s request for comment by press time.

Hindenburg took out a short position following its research, the report discloses, and the firm attempts to use Ebang as an example of caveat emptor for Western investors jumping at publicly traded crypto stocks before doing their due diligence.

On Wednesday, Ebang’s team responded to the report with a U.S. Securities and Exchange Commission press release, complaining that the report was unsubstantiated. 

“Based on the review by the Company’s management team, we believe that the Hinderburg Report contain [sic] many errors, unsupported speculations and inaccurate interpretations of events. The Company’s Board of Directors has also been made aware of the Hindenburg Report,” the release reads.

“The Board, together with its Audit Committee, intends to further review and examine the allegations and misinformation therein and will take whatever necessary and appropriate actions may be required to protect the interest of its shareholders.”

Updated April 7, 2021, 15:13 UTC: This article was updated to include details from an Ebang press release which refutes Hindenburg’s report.