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Cryptocurrency mining company Riot Platforms, formerly Riot Blockchain, is seeking to recover “more than $26 million” in alleged unpaid fees from Texas-based bitcoin (BTC) mining ventures Rhodian, according to a Q1 2023 report.
A Riot report released May 10 states that Whinstone, a Riot subsidiary, filed a petition on May 3 against Rhodium Enterprises, alleging a breach of contract after failing to pay “certain hosting and maintenance fees in accordance with the agreements.”
Riot is seeking to recover “more than $26 million,” as well as legal fees and other expenses incurred in the course of the trial, as stated in the report.
In addition, it was requested that “certain hosting agreements” with Rhodium be terminated and “that Rhodium not be owed electricity.”
While the disclosure of unpaid fees has been announced, Riot has provided transparency to stakeholders by acknowledging that the “probability” of a refund at this stage is uncertain. He noted:
“Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an adverse outcome or the magnitude, if any, of such an outcome.”
It was reported that Rhodium was filed on May 8, and should be answered by May 30.
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The report also highlights the growth of Riot’s mining operations, stating that “2,115 Bitcoins” (BTC) have been mined, which is 50.5% more than the number of Bitcoins mined in the first quarter of 2022.
In addition, the report reassured stakeholders that Riot has no ties to the banks that have recently failed. He noted:
“We have not had any banking relationship with Silicon Valley Bank, Silvergate Bank or First Republic Bank and we currently hold our cash and cash equivalents with several banking institutions.
Riot expects Bitcoin mining companies will continue to face significant challenges due to the significant fall in Bitcoin prices and “other national and global macroeconomic factors,” as happened in the industry in 2022.
It was stated that given Riot’s “relative position” in the industry, “liquidity and lack of long-term debt”, it could “benefit from such consolidation”.