Bitcoin miner Riot sues Rhodium Enterprises for unpaid fees worth $26 million
- A subsidiary of Bitcoin miner Riot Platforms is suing another miner, Rhodium Enterprises for $26 million in unpaid fees.
- Riot says that Rhodium “deliberately miscalculated” how much it had to pay in hosting fees for Riot’s services.
Whinstone US, a subsidiary of Bitcoin [BTC] miner Riot Platforms (RIOT), is suing another miner, Rhodium Enterprises, stating that it is owed $26 million in hosting costs and requesting that a local court rule that it does not owe the defendant any credits relating to demand response programs.
Riot first revealed its allegations in its first-quarter earnings report on 13 May, and its participation in demand response programs, in which crypto miners receive power credits in exchange for limiting their energy consumption, is the main reason for the lawsuit. Riot filed a civil complaint for breach of contract with the district court of Milam County in Texas on 2 May and named four of Rhodium’s subsidiaries as defendants.
Rhodium “deliberately miscalculated” its payments?
Riot says that Rhodium “deliberately miscalculated” how much it had to pay in hosting fees for Riot’s services. The lawsuit mentions that both the companies intended to split the net revenue from Rhodium’s mining at the Whinstone facilities, which also claimed that the Rhodium cheated Whinstone out of $26 million between 2021 and the first quarter of 2023.
Whinstone claims that it attempted to collect the payments in May 2022, and on 5 April, but the Rhodium entities refused or failed to pay, prompting the complaint.
Besides, Riot argues that Rhodium’s units accumulated power credits on their books for two years that it did not own. Riot also wants the court to rule that it owes Rhodium no power credits. Riot believes that the power credits may have had a legal foundation under previous contracts, but that those have been superseded by the December 2020 agreements.
Rhodium’s crypto entities sought Whinstone in October 2022 to “verify” that they were “owed” electricity credits unrelated to the expired contracts. Whinstone denied the proposal and requested the court to rule that it owes Rhodium no such credits.