Riot Platforms, a firm on crypto mining, known earlier as Riot Blockchain is pursuing legal action with regards to Rhodium Enterprises, a Bitcoin miner based out of Texas. Riot Platforms seeks to recover over $26M as alleged unpaid fees for the use of mining facilities.
Rhodium Heading Into Big Trouble
As per the financial report for Q1 2023 of Riot Platform that was released on May 10th, there was an alleged breach of contract by Rhodium when it failed to pay service and hosting fees they owe to Riot associated with the usage of the Whinstone mining facilities for Bitcoin. Whinstone is a completely Riot-owned subsidiary.
On May 2nd, Rhodium Enterprises were named as the primary accusers in a petition filed in Texas’ Milam County Court. It sought to get back over $26M as well as the reimbursement for all the legal fees that may be incurred.
Moreover, Riot asked to let them end certain agreements with regard to hosting with Rhodium. They further presented a proposal to not have to pay any outstanding credits regarding power when the cessation ends. However, it is acknowledged that it is uncertain how likely it is to recover the fees that are yet to be paid.
On May 8th, Rhodium received the legal notice and was given till May 30th to respond, as per the report. At the same time, the report further revealed that 2115 Bitcoins were mined by Riot during Q1 2023. This is a 50.5% increase over the number reported during Q1 2022.
As a further note, it was acknowledged that Riot had no connection with the bank collapses that occurred recently. As such, Riot expects companies related to crypto mining to continue experiencing challenges this year because of Bitcoin’s significant decline in price.
