Rhodium Sued by BTC Miner Riot Platforms Over $26M in Unpaid Fees
- Riot Platforms, formerly known as Riot Blockchain, has sued Texas-based Bitcoin mining firm Rhodium Enterprises over unpaid fees.
- Through the lawsuit, Riot aims to recover allegedly $26 million in unpaid fees related to the use of Whinstone’s BTC mining facilities.
- The petition against Rhodium Enterprises was filed on May 2 in the District Court of Milam County in Texas, and it was served on May 8.
- The plaintiff also noted that “the likelihood” of recovering the unpaid fees at the current stage is uncertain.
In a shocking turn of events, a popular Bitcoin (BTC) mining company, formerly known as the Riot Blockchain and now called Riot Platforms, has sued Rhodium Enterprises, a Texas-based, digital asset technology company that uses proprietary tech to self-mine BTC. The lawsuit claims that the self-mining firm has not paid around $26 million in mining facility fees that it owes to Riot Platforms.
As per the financial earnings report for Q1, 2023, published earlier this week, Rhodium Enterprises failed to pay Riot Platforms the fee that it owed to the company for service and hosting related to the use of Whinstone’s Bitcoin mining facilities, a wholly owned subsidiary of Riot. As a result, they breached the contract that was signed by the two firms.
It is also important to mention here that the petition against Rhodium Enterprises was filed on May 2 in the District Court of Milam County in Texas. It stated that Riot aims to recover “more than $26 million” from the Texas-based firm and also seeks reimbursement for the legal fees that will be incurred during the legal battle between the two firms.
The petition also said that “certain hosting agreements” are terminated, adding that Riot Platforms is not exempt from repaying any outstanding power credits to Rhodium Enterprises. The plaintiff also noted that “the likelihood” of recovering the unpaid fees at the current stage is uncertain.
“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.”
Furthermore, Rhodium was served with the lawsuit on May 8 and has until May 30 to respond to it and take the trial further.
Some other financial details were included in the report as well. Riot stated that it had mined “2,115 bitcoins” in Q1 2023, an increase of 50.5% compared to Q1 2022. Moreover, it stated that it has no affiliations with the firms that have collapsed recently, while adding:
“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.”
On the other hand, Riot also noted that crypto mining companies will continue to experience a sharp decline in their businesses in 2023 due to the “significant price decline of Bitcoin” and “other national and global macroeconomic factors.” It believes that its “relative position” in the industry and its “liquidity and absence of long-term debt” make it well positioned to “benefit from such consolidation.”
As reported earlier by BitcoinWisdom, last year in June, Riot confirmed that it had appointed Colin Yee as a new CFO, who replaced Jeff McGonegal on August 15. The company sold a significant amount of Bitcoin that it had mined in the first quarter of 2022 due to the prevailing crypto winter and a significant crash in the price of BTC.
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.
