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Riot, a Bitcoin miner, sues Rhodium Enterprises for $26M in unpaid fees.

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The two mining companies are having a disagreement mainly because of their involvement in demand response programs in Texas.

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Whinstone US, a part of the bitcoin mining company Riot Platforms (RIOT), is taking legal action against Rhodium Enterprises, another mining firm. They claim that Rhodium owes them $26 million in hosting fees. Riot is also seeking a court declaration that they don’t owe any credits related to demand response programs to Rhodium.

According to Riot’s quarterly earnings report and a petition obtained by CoinDesk, the main issue leading to the lawsuit is Riot’s participation in demand response programs. These programs provide power credits to bitcoin miners in order to limit their energy consumption. Riot filed a civil case for breach of contract against Rhodium and four of its subsidiaries in the district court of Milam County, Texas, on May 2.

Riot alleges that Rhodium intentionally made mistakes in calculating the amount of money owed for hosting services at Riot’s facilities. According to the lawsuit, both companies had an agreement to share the earnings from Rhodium’s mining activities at the Whinstone facilities. The lawsuit claims that Rhodium failed to pay Riot the full amount, resulting in a shortfall of $26 million from 2021 to the first quarter of 2023.

Whinstone made efforts to collect the payments in May 2022 and on April 5, but the Rhodium entities refused or failed to pay, resulting in the lawsuit.

Separately, Riot claims that Rhodium’s units accumulated power credits on their records for two years without proper rights. Riot also wants the court to declare that they don’t owe Rhodium any power credits. Riot states that while previous contracts might have allowed for these power credits, they were superseded by agreements made in December 2020.

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In October 2022, the Rhodium entities requested Whinstone to confirm the power credits they believed they were owed, which were unrelated to expired contracts. Whinstone rejected the request and asked the court to declare that they have no obligation to provide such credits to Rhodium.

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  • SHBAZ

    A crypto enthusiast, Loves to write, Loves to explore and stay up-to-date about the latest developments in the crypto world. #Btc #Crypto #NFT

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