BTC miner Rhodium faces lawsuit over alleged $26M in unpaid fees: Report
Crypto mining company Riot Platforms – formerly Riot Blockchain – is seeking to recover “more than $26 million” in alleged unpaid fees from Texas-based Bitcoin (BTC) miner Rhodian Enterprises, according to its Q1 2023 report.
Published on May 10, Riot’s Q1 2023 financial report stated that Whinstone – a wholly owned subsidiary of Riot – has filed a lawsuit against Rhodium Enterprises on May 3, alleging breach of contract for failure to pay “certain hosting and service fees in accordance with agreements. “
Riot is seeking to recover “more than $26 million,” plus legal fees and other expenses incurred during the litigation, as detailed in the report.
It was further requested that “certain hosting agreements” with Rhodium be terminated and “that no power credits be owed to Rhodium.”
Although the disclosure of unpaid fees was stated, Riot provided transparency to stakeholders by acknowledging that the “likelihood” of recovering the funds is uncertain at this stage. It noted:
“Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an adverse outcome or the extent, if any, of such an outcome.”
It was reported that Rhodium was served on May 8, and has until May 30 to respond.
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The report also emphasized Riot’s growth in mining, stating that it had mined “2,115 Bitcoins” (BTC), representing a 50.5% increase from the number of Bitcoins mined during the first quarter of 2022.
Furthermore, stakeholders were assured in the report that Riot has no connection to the banks that have experienced collapse in recent times. It noted:
“We had no banking relationships with Silicon Valley Bank, Silvergate Bank or First Republic Bank and currently hold our cash and cash equivalents with multiple banking institutions.
Riot expects Bitcoin mining companies to continue to experience significant challenges due to the significant decline in the price of Bitcoin and “other domestic and global macroeconomic factors,” as the industry saw in 2022.
It was stated that given Riot’s “relative position” in the industry, “liquidity and absence of long-term debt”, it is positioned to “benefit from such consolidation.”
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