Crypto Miner Sphere 3D Sues Gryphon Digital Mining: Details
- Sphere 3D has filed a lawsuit against its partner Gryphon Digital Mining over the irregular transfer of bitcoin (BTC), as per court documents.
- The mining company claims that Gryphon Digital Mining put the assets belonging to Sphere 3D at risk.
- We believe that Gryphon has put the company’s assets at significant risk and willfully violated their contractual duties.” said the mining firm’s CEO.
- Gryphon CEO Rob Chang allegedly transferred Bitcoin (BTC) to a fraudster claiming to be Sphere 3D’s chief financial officer through a spoofing attack.
- The lawsuit is based on this transfer of BTC by CEO Chang to the fraudster.
Cryptocurrency mining companies were deeply impacted by the fall in the price of crypto coins, and many companies even filed for bankruptcy as well. Amid these uncertain times, crypto mining company Sphere 3D has filed a lawsuit against its partner Gryphon Digital Mining over the irregular transfer of Bitcoin (BTC), as per documents submitted in court on April 7.
According to a press release, Sphere 3D, whose goal is to become a leading carbon-neutral crypto mining company, claims that Gryphon Digital Mining put the assets belonging to the company at risk. It is crucial to note here that the two companies considered merging at one time, but the situation has worsened gradually.
“Today we filed litigation against Gryphon, the custodial management services provider of our blockchain and cryptocurrency-related services, for materially breaching the Master Services Agreement (“MSA”) we entered into with Gryphon. We believe that Gryphon has put the company’s assets at significant risk and willfully violated their contractual duties.” Patricia Trompeter, the CEO of Sphere 3D, said.
Sphere 3D and Gryphon entered into the MSA on August 19, 2021, which was subsequently amended on December 29, 2021, and called for Gryphon to “manage Sphere 3D’s crypto mining activities as well as maintain fiduciary duties over Sphere’s digital assets.”
As a result of the agreement between the two, Gryphon receives 22.5% of the crypto miner’s profits in exchange for the aforementioned services.
According to the complaint filed by lawyers representing the crypto mining firm, Gryphon CEO Rob Chang allegedly transferred Bitcoin (BTC) to a fraudster claiming to be Sphere 3D’s chief financial officer through a spoofing attack on January 18. An additional eight bitcoins were sent to the same address a few days later as well.
A spoofing attack is defined as a fraudulent activity in which the attacker claims to be someone else by falsifying identity with the help of similar IP addresses, email headers, or user credentials. Thereafter, the attackers gain access to a system, steal sensitive information, or launch further attacks.
“My job, first and foremost, is to safeguard the assets of the company and maximize shareholder value. Today’s filing demonstrates that we will not only protect the company that we all have worked so hard to navigate through the past year, but also that we will not be bullied or threatened by the likes of Gryphon. Corporate integrity is essential, including in our industry. Gryphon has failed to act with integrity, has failed to honor our contract, and we will hold them accountable,” said Trompeter.
On the other hand, New York became the first US state to announce a temporary ban on proof-of-work mining activities after the state’s governor, Kathy Hochul, signed the proof-of-work (PoW) mining moratorium into law.
The POW law will not only ban new mining operations but will also prevent companies that are already operating in the state from renewing their permits. Mining firms will only be allowed to operate if they use renewable sources of energy.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
