Riot Platforms, previously known as Riot Blockchain, a crypto mining company, has initiated legal proceedings against Rhodium Enterprises, a Bitcoin miner based in Texas. The dispute involves recovering an alleged unpaid sum exceeding $26 million in mining facility fees.
Riot Platforms, in its Q1 2023 financial statement released on May 10, claimed that Rhodium violated their contract by not meeting the payment obligations for hosting and service fees. These fees were related to the use of Whinstone’s Bitcoin mining facilities, which Riot Platforms fully owns.
On May 2, a legal petition was lodged against Rhodium Enterprises in the Milam County Court in Texas. The petition seeks to recoup “over $26 million” and requests reimbursement for any legal expenses incurred.
In addition, Riot has asked for authorization to end “certain hosting agreements” with Rhodium. They also proposed that they should not be obligated to pay back any remaining power credits after stopping these services.
Riot Platforms acknowledged the uncertainty surrounding the possible recovery of these unpaid fees at this stage of the litigation. They stated:
“At this early stage of the litigation, it’s not possible to reasonably predict the probability of a negative outcome or the extent of such an outcome, if it happens.”
According to the report, Rhodium was served on May 8 and given until May 30 to respond.
The report also disclosed that Riot Platforms had successfully mined “2,115 Bitcoins” in the first quarter of 2023, marking a 50.5% rise from Q1 2022.
The report clarified that Riot Platforms had no involvement with recent bank failures, stating:
“We have no banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, and currently we keep our cash and cash equivalents in several banking institutions.”
Riot Platforms anticipates ongoing challenges for crypto mining businesses in 2023. This is due to the “significant drop in Bitcoin’s value” and “other national and global macroeconomic factors.”
However, Riot believes its “relative position” in the industry, coupled with its “liquidity and lack of long-term debt,” places it in a strong position to “benefit from such consolidation.”
