Riot Platforms, a crypto mining company, wants to end some agreements with Rhodium, a hosting service. They are also asking not to be responsible for any power credits they owe to Rhodium.
Riot Platforms, a crypto mining company previously known as Riot Blockchain, has filed a lawsuit against Rhodium Enterprises, a Bitcoin miner in Texas. They are seeking to recover over $26 million that they claim Rhodium owes them in unpaid fees for using their mining facilities.
In Riot Platform’s financial report for the first quarter of 2023, which was released on May 10th, they mentioned that Rhodium Enterprises supposedly violated their agreement by not paying the fees for using Whinstone’s Bitcoin mining facilities. Whinstone is a company owned completely by Riot.
On May 2nd, a petition was submitted to the District Court of Milam County in Texas against Rhodium Enterprises. The petition aims to reclaim over $26 million in unpaid fees that Rhodium allegedly owes. Additionally, it also includes the request for reimbursement of legal fees and other expenses associated with the ongoing legal process.
Riot also asked for the termination of specific hosting agreements and suggested that they should be excused from repaying any remaining power credits owed to Rhodium.
At this point, it is uncertain how likely it is for the unpaid fees to be recovered. The current stage of the litigation makes it difficult to predict the chances of an unfavorable outcome or the potential impact of such an outcome, if any.
Rhodium received the legal papers on May 8th and has until May 30th to respond, as mentioned in the report. In the meantime, Riot highlighted the growth of its mining operations, stating that they had mined 2,115 Bitcoins in the first quarter of 2023. This reflects a 50.5% increase compared to the same period in 2022.
The report also made it clear that Riot is not associated with any banks that have faced collapses in recent times.
Riot clarified that they didn’t have any connections or partnerships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank. They also mentioned that their cash and cash equivalents are held in multiple banking institutions.
Riot expects that crypto mining companies will face difficulties because of the significant drop in Bitcoin prices and other economic factors on a national and global scale.
They mentioned that Riot’s standing in the industry, along with its good financial situation (having enough money available) and no long-term debts, puts them in a favorable position to benefit from the consolidation (coming together) of companies in the industry.
