Bitcoin mining is–or was until a few months ago–a high revenue industry. As such, you get your occasional lawsuit. What can you say? Fiat or not, people want their money.
Briefly, we will take a look at the top lawsuits to be aware of. Each suit has different merits, to which we hold no special knowledge of the subject. Rather, the suits are instructive about what everyone in the Bitcoin mining space is arguing over on a daily basis on Telegram, with the occasional spill over in court.
GMO Internet v. Whinstone US
Whinstone is the operator of the Rockdale, Texas mega-mine, the largest mine in the United States at some 750 megawatts (MW) in capacity. It’s also a wholly owned subsidiary of Riot Blockchain which purchased the hosting and construction firm in 2021.
GMO Internet is a Japanese conglomerate with fingers in many tech pies, including Bitcoin mining. GMO Internet contracted Whinstone in 2018 to host 120 MW of machinery, rolling out in various stages.
Deployment troubles at Winston's initial Louisiana facility put the business relationship on bad terms. An agreement to host at the Rockdale site salvaged the deal, court documents show.
Three years later, however, GMO is suing Whinstone $35 million for failure to pay back losses derived from deployment delays, among other details. Whinstone filed a countersuit Monday for $15 million in damages. Whinstone alleges GMO failed to use its contracted energy allotment, largely due to outdated equipment.
For further analysis, read this great tweet thread from Bitcoin researcher Wolfie Zhao.
Crusoe Energy v. Alkane Midstream
Crusoe Energy–the poster boy for all things Bitcoin mining and natural gas flaring–has filed suit for patent infringement and business tampering against Minneapolis-based firm Alkane Midstream.
The suit details Crusoe Energy’s loss of an oil and gas related project in Colorado to Alkane. Crusoe alleges Alkane improperly and with foreknowledge took Crusoe’s technology ‘Digital Flare Mitigation System,’ to the detriment of Crusoe’s business.
GeoBitmine petition to the Idaho Utilities Authority
GeoBitmine is an Idaho-based mining operation using ASIC waste heat to warm potato cellars. The Idaho Utilities Authority has classified GeoBitmine as a ‘Schedule 20’ user, subjecting the firm to higher electrical rates and onerous service constraints. On the surface, the Schedule 20 classification reads as a formal rule to disincentivize Bitcoin mining within the region.
GeoBitmine asked for and received reconsideration of the “illegally discriminatory classification.” The power utility and firm remain in negotiations for a final price.
Adams County v. Renegade Oil & Gas Company
Adams County extends east from Denver, Colorado. Renegade Oil and Gas operates stranded natural gas Bitcoin mining operations on a few well sites that would otherwise flare.
As covered in the Denver Post, Adams County issued a cease and desist order against Renegade Mining in May 2022. Weeks later, the county found Renegade had not complied. The county has filed a suit against the mining operation for failure to obey local regulations including addressing gas leaks, lack of an emergency response plan, and continued running of the operation without approval.
The county has received blow back from numerous Colorado-based Bitcoin mining operations, claiming the lawsuit is an intrusion. Adams County community and economic director Jenni Hall agreed the mine was “an innovation,” but needed to be done in a “way that’s safe.”
