Rhodium Was Accused Of Owing $26 Million In Hosting Fees

Whinstone US, a subsidiary of cryptocurrency miner Riot, claims Rhodium owes it $26 million in hosting costs.

Rhodium Was Accused Of Owing $26 Million In Hosting Fees

Bitcoin mining firm, Riot Platforms, has taken legal action against fellow miner, Rhodium Enterprises, for breach of contract. According to Riot Platform’s Q1 2023 financial report, R.E failed to pay hosting and service costs related to the usage of Whinstone’s Bitcoin mining facilities, a fully owned subsidiary of Riot. The lawsuit was filed on May 2 in the district court of Milam County, Texas, and names four of company’s subsidiaries as defendants.

Riot Platforms claims that Rhodium intentionally overestimated the amount it had to pay in hosting costs for Riot’s services. The two companies were supposed to split the net income from company’s mining at the Whinstone facilities, but according to the complaint, Rhodium cheated Whinstone out of $26 million between 2021 and Q1 2023.

Riot Platforms also alleges that Rhodium’s businesses amassed power credits on their books that they did not possess for two years and wants the court to determine that it owes no power credits to company.

Whinstone attempted to collect the payments in May 2022 and on April 5, but company’s businesses refused or did not pay, prompting the complaint. The corporation was served on May 8 and has until May 30 to respond.

Riot Platforms reported that it mined 2,115 Bitcoins in Q1 2023, a 50.5% increase over Q1 2022. However, it expects crypto mining companies to face new challenges in 2023 due to the severe price decrease of Bitcoin and other national and global macroeconomic variables.

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