Crypto mining firm Riot Platforms seeks to terminate “certain hosting agreements” with Rhodium and requests exemption from any owed power credits to the counterparty.
Crypto mining firm Riot Platforms – formerly Riot Blockchain – has taken legal action against Texas-based Bitcoin (BTC) miner, Rhodium Enterprises, in an effort to recover “more than $26 million” in alleged unpaid mining facility fees.
According to Riot Platform’s Q1 2023 financial report published on May 10, Rhodium Enterprises allegedly breached its contract with Riot by failing to pay hosting and service fees associated with the use of Whinstone’s Bitcoin mining facilities, a wholly owned subsidiary of Riot.
A petition was filed against Rhodium Enterprises on May 2 in the District Court of Milam County in Texas, seeking to recover “more than $26 million” in alleged unpaid fees, as well as an legal fees and other expenses that are incurred during the legal proceedings.
Riot further requested that “certain hosting agreements” are terminated and proposed that it is exempt from repaying any outstanding power credits to Rhodium.
It was acknowledged that estimating “the likelihood” of recovering the unpaid fees at this stage is uncertain. It noted:
“Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any.”
Rhodium was served on May 8, and have a deadline to respond by May 30, according to the report.
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Meanwhile, Riot emphasized its mining operations growth, stating that it had mined “2,115 Bitcoins” in Q1 2023, an increase of 50.5% compared to the first quarter of 2022.
Furthermore, it was noted that Riot did not have any affiliations with the banks that have experienced collapses in recent times. It noted:
“We did not have any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, and currently hold our cash and cash equivalents at multiple banking institutions.
Riot anticipates that crypto mining companies will continue to experience challenges 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.”
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