Riot Platforms, formerly Riot Blockchain, has filed a lawsuit against Texas-based Rhodium Enterprises, a Bitcoin mining company. A total of $26 million in allegedly unpaid mining facility fees are the target of the legal action. By failing to pay the hosting and service fees related to using Riot Platforms’ subsidiary Whinstone’s Bitcoin mining facilities, Rhodium, according to Riot Platforms, violated their contract.
They have submitted a petition against Rhodium at the Milam County Court in Texas, according to Riot Platforms’ Q1 2023 financial report, which was submitted on May 10. Riot Platforms also claimed payment for any legal costs expended throughout the court process in addition to the recovery of more than $26 million.
The business proposed to be excused from paying back any remaining power credits when specific hosting arrangements with Rhodium were terminated and also stated its wish to do so. It is difficult to predict the likelihood of recovering the unpaid fees at this time because the lawsuit is still in its early stages, according to the financial report.
Riot Platforms claimed, “We cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any.”
According to the report, Rhodium was served on May 8 and has until May 30 to respond. It was additionally stated that Riot had no connections to recent bank failures:
“We currently hold our cash and cash equivalents at a number of banking institutions. We did not have any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank.”
In other news, Riot Platforms revealed that it mined 2,115 Bitcoins in total in Q1 2023, a huge rise of 50.5% over the same time last year. This accomplishment demonstrates Riot Platforms’ ongoing success in the cryptocurrency mining sector.
Riot Platforms does not have any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, it was made clear in the financial report. In order to emphasize its diverse approach to managing its finances, the corporation keeps its cash and cash equivalents across a number of banking institutions.
Looking ahead, Riot Platforms predicts that the crypto mining industry will see difficulties in 2023 as a result of the sharp decrease in the price of Bitcoin and other macroeconomic reasons. The company does feel that it is well-positioned to profit from prospective market consolidation due to its strong industry position, liquidity, and lack of long-term debt.
The outcome of the legal dispute between Riot Platforms and Rhodium Enterprises is still up in the air. The dedication of Riot Platforms to recouping the allegedly underpaid fees highlights the significance of contractual duties in the Bitcoin mining sector, nevertheless.