Riot Platforms, formerly known as Riot Blockchain, has taken legal action against Texas-based Bitcoin miner Rhodium Enterprises to recover over $26 million in alleged unpaid mining facility fees. According to Riot Platform’s Q1 2023 financial report published on May 10, Rhodium breached its contract with Riot by failing to pay hosting and service fees associated with using Whinstone’s Bitcoin mining facilities, a wholly owned subsidiary of Riot. Riot filed a petition against Rhodium Enterprises on May 2 in the Milam County Court in Texas seeking to recover $26 million and be reimbursed for any legal fees incurred. Riot also requested permission to terminate certain hosting agreements with Rhodium and proposed to be exempt from repaying any outstanding power credits upon cessation.
The report revealed that Riot had mined 2,115 Bitcoins in Q1 2023, an increase of 50.5% over Q1 2022. It was further noted that Riot did not have any affiliations with recent bank collapses. Riot anticipates that crypto mining companies will continue to experience challenges in 2023 due to the significant price decline of Bitcoin and other national and global macroeconomic factors. It was stated that Riot’s relative position in the industry, as well as its liquidity and absence of long-term debt, makes it well-positioned to benefit from such consolidation.
Estimating the likelihood of recovering the unpaid fees at this stage is uncertain, and it remains to be seen how the litigation will unfold. Rhodium was served on May 8, with a deadline to respond by May 30, according to the report. The legal dispute underscores the importance of paying fees related to using mining facilities and the consequences of breaching contractual obligations.
The rise in Bitcoin mining activity has coincided with an increase in demand for mining equipment and services around the world. Riot has positioned itself as a leading crypto mining firm in the US, with a focus on its mining operations in Texas. Through its wholly owned subsidiary Whinstone, Riot operates one of the largest Bitcoin mining facilities in North America, with a capacity of 750 megawatts.
Riot’s move to take legal action against Rhodium is not the only instance of such a case in recent times. Complaints have been filed against other companies, such as Compass Mining, for losing Bitcoin mining machines bought by customers amidst the limited availability of mining equipment globally in the current market.
In conclusion, Riot Platforms is seeking to recover over $26 million in alleged unpaid mining facility fees from Texas-based Bitcoin miner Rhodium Enterprises. According to a Riot Platform’s Q1 2023 financial report published on May 10, Rhodium breached its contract with Riot by failing to pay hosting and service fees associated with using Whinstone’s Bitcoin mining facilities, a wholly owned subsidiary of Riot. Riot has positioned itself as a leading crypto mining firm in the US, with a focus on its mining operations in Texas. Through its subsidiary Whinstone, Riot operates one of the largest Bitcoin mining facilities in North America. The legal dispute emphasizes the importance of paying fees related to using mining facilities and the implications of breaching contractual obligations.
