Crypto mining company Riot Platforms — formerly Riot Blockchain — has taken legal action in an effort to recover “more than $26 million” in alleged unpaid fees from Rhodian Enterprises, a Texas-based Bitcoin (BTC) mining company.
According to Riot Platform’s Q1 2023 financial report published May 10, Whinstone, a wholly owned subsidiary of Riot, filed a petition against Rhodium Enterprises on May 2 in Milam County Court in Texas.
It alleged that Rhodium Enterprises breached its contract by failing to pay hosting and service fees associated with its use of Whinstone’s mining facilities.
Riot is seeking to recover “more than $26 million,” in addition to legal fees and other expenses incurred during the legal proceedings, as described in the report.
It also asked for the termination of “certain hosting agreements” with Rhodium and proposed that it be excused from paying any outstanding energy credits to the Texas-based Bitcoin mining company.
Despite mentioning the disclosure of unpaid fees, Riot has been transparent with stakeholders, acknowledging that the “potential” for refunds at this point is uncertain. I noticed:
“Because this litigation is still at this early stage, we cannot estimate the likelihood of an unfavorable outcome or the magnitude, if any, of that outcome.”
It was reported that Rhodium was submitted on May 8, and he has until May 30 to respond.
Related: A complaint filed against Compass Mining for losing BTC miners hits a snag
The report also emphasized Riot’s growth in mining operations, noting that it mined “2,115 Bitcoins,” which is a 50.5% increase over the number of bitcoins mined during the first quarter of 2022.
Furthermore, the report reassured stakeholders that Riot has no affiliation with banks that have been subjected to recent collapses. I noticed:
We have never had any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, and currently hold cash and cash equivalents at several banking institutions.
Riot expects cryptocurrency miners to continue to face challenges due to the “significant drop in Bitcoin prices” and “other national and global macro-economic factors” as seen in 2022.
He stated that given Riot’s “relative position” in the industry, and its “liquidity and absence of long-term debt”, it was in a position to “benefit from this merger”.
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