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Crypto mining company Riot Platforms – previously known as Riot Blockchain – has initiated legal proceedings against Texas-based Bitcoin (BTC) miner, Rhodium Enterprises, in an attempt to recover “over $26 million” in purported unpaid mining facility charges.
As per Riot Platform's Q1 2023 financial report released on May 10, Rhodium Enterprises is accused of violating its agreement with Riot by neglecting to pay hosting and service fees linked to the utilization of Whinstone's Bitcoin mining facilities, which is a wholly owned subsidiary of Riot.
A lawsuit was lodged against Rhodium Enterprises on May 2 in the District Court of Milam County, Texas, aiming to reclaim “over $26 million,” along with reimbursement for legal expenses incurred during the litigation.
Riot also requested the termination of “certain hosting agreements” and suggested that it should not be obligated to repay any outstanding power credits to Rhodium.
Extract of Riot Platforms quarterly report for the period ended March 31. Source: SEC
It was recognized that assessing “the likelihood” of recovering the unpaid fees at this point is uncertain. It remarked:
“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.”
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Rhodium was served on May 8 and has until May 30 to respond, according to the report.
Related:Complaint filed against Compass Mining for losing BTC mining machines hits snag
In the meantime, Riot reported that it mined “2,115 Bitcoins” in Q1 2023, marking a 50.5% increase compared to Q1 2022.
It was further indicated that Riot has no connections with the banks that have recently faced failures. It stated:
“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.
Riot expects that crypto mining firms will continue to face difficulties in 2023 due to the “significant price decline of Bitcoin” and “other national and global macroeconomic factors.”
It was mentioned that Riot's “relative position” in the industry, along with its “liquidity and absence of long-term debt,” positions it favorably to “benefit from such consolidation.”
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