Crypto mining firm Riot Platforms is seeking to terminate “certain hosting agreements” with Rhodium Enterprises and be relieved of refunding any outstanding power credits.
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Crypto mining firm Riot Platforms — formerly Riot Blockchain — has taken legal action against Texas-based Bitcoin (BTC) miner Rhodium Enterprises 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 allegedly 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.
A petition was filed against Rhodium Enterprises on May 2 in the Milam County Court in Texas, seeking to recover “more than $26 million” and be reimbursed for any legal fees incurred.
Furthermore, Riot requested permission to terminate “certain hosting agreements” with Rhodium and proposed to be exempt from repaying any outstanding power credits upon cessation.
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, with a deadline to respond by May 30, according to the report.
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Meanwhile, the report also 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:
“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 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.”
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