To recoup “more than $26 million” in allegedly unpaid mining facility fees, cryptocurrency mining company Riot Platforms, formerly known as Riot Blockchain, has filed a lawsuit against Texas-based Bitcoin miner Rhodium Enterprises.
BTC Miner Rhodium to be Sued for $26 Million, According to Report
Rhodium allegedly broke its agreement with Riot by neglecting to pay hosting and service fees related to using Whinstone’s Bitcoin mining facilities, a wholly owned subsidiary of Riot, according to the Q1 2023 financial report from Riot Platform, which was released on May 10.
On May 2, a petition was submitted in Texas’ Milam County Court against Rhodium Enterprises, requesting “more than $26 million” in damages and reimbursement for any incurred legal costs.
Riot to Terminate Certain Hosting Agreements
Riot also asked for permission to end “certain hosting agreements” with Rhodium and planned to be excused from paying back any remaining power credits when the agreements were terminated. It was accepted that it is difficult to predict whether or not the outstanding fees will be recovered at this point.
Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any.
Riot
About the Report
Riot mined “2,115 Bitcoins” in Q1 2023, up 50.5% from Q1 2022, according to the report. It was additionally stated that Riot had no connections to recent bank failures:
We did not have any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, and currently hold our cash and cash equivalents at multiple banking institutions.
Riot
Riot expects that the “significant price decline of Bitcoin” and “other national and global macroeconomic factors” will make it difficult for cryptocurrency mining companies to operate in 2023.
Leave a comment