Riot Blockchain (RIOT)’s Bitcoin mining facility Whinstone is seeking at least US$15 million in damages from Japanese tech company GMO Internet in a four-year-long dispute over usage of mining equipment, according to a document filed in the U.S. District Court for the Southern District of New York on Monday.
See related article: Crypto miners plan to fork Ethereum, will it make a difference to the Merge?
Fast facts
- The dispute between the two companies started in 2018 but has become more acrimonious since rising power costs led hosting companies to impose higher electricity costs to operate the machines, according to Coindesk.
- Whinstone’s lawsuit follows GMO Internet’s claim in June which alleged the mining operator had cost the company US$50 million in losses from failing to lodge GMO machines in Louisiana and Texas mining sites and also overcharging for electricity.
- GMO Internet claimed that the operation in the Louisiana site came three months late and made room for 385 machines rather than the agreed number of 66,693. It added that the site closed down in 2019 due to issues with securing power.
- The two continued their business relationship by moving onto hosting GMO machines in Texas for lower fees, with repayment of GMO’s original deposit and compensation for loss of profits caused by power outages.
- The Japanese tech firm alleges discussions over the losses stopped after Riot acquired the facility.
- Whinstone has denied the allegations made by GMO in regards to the Louisiana site. Whinstone claims the owed damages come from failure to agree on a new contract, and for electricity purchased and reserved for GMO that has not been used.
See related article: Riot Blockchain earns millions in credits by cutting energy use during Texas heat wave