Crypto mining firm Riot Platforms – formerly Riot Blockchain – is seeking to recover “more than $26 million” in alleged unpaid fees from Texas-based Bitcoin (BTC) miner, Rhodian Enterprises, according to its Q1 2023 report.
Published on May 10, Riot’s Q1 2023 financial report said that Whinstone, a wholly owned subsidiary of Riot, filed a petition on May 2 in the 20th District Court of Milam County, Texas. It alleged that Rhodium Enterprises breached its contract by failing to pay “certain hosting and service fees” related to its use of Whinstone’s facilities for mining operations.
Riot is seeking to recover “more than $26 million,” plus legal fees and other costs incurred during the legal proceedings, as outlined in the report.
It further requested that “certain hosting agreements” with Rhodium be terminated and “no power credits are owed to Rhodium.”
Although the disclosure of unpaid fees has been announced, Riot is transparent with stakeholders, acknowledging that “the likelihood” of recovering funds at this stage is uncertain. It says:
“Because this litigation is still at an early stage, we cannot reasonably estimate the likelihood of an adverse outcome or the magnitude of such an outcome, if any.”
Rhodium was reportedly served on May 8, and until May 30 to respond.
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The report also highlighted Riot’s progress in mining operations, saying it mined “2,115 Bitcoins” (BTC), representing an increase of 50.5% from the number of Bitcoins mined in the first quarter in 2022.
In addition, stakeholders were assured in the report that Riot does not have any ties to banks that have experienced collapse in recent times. It says:
“We do not have any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, and currently hold our cash and cash equivalents at several banking institutions.
Riot expects that Bitcoin mining companies will continue to experience many challenges due to the significant decline in the price of Bitcoin and “other national and global macroeconomic factors,” as the industry sees in 2022.
It stated that due to Riot’s “relative position” in the industry, “liquidity and absence of long-term debt,” it is positioned to “benefit from such consolidation.”
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