The cryptocurrency mining entity, Riot Platforms, is reportedly pursuing a course of action to nullify “selective hosting agreements” with Rhodium Enterprises. The company also seeks an exemption from repaying any residual power credits.
Formerly known as Riot Blockchain, Riot Platforms has embarked on a legal battle against the Texan Bitcoin mining operation, Rhodium Enterprises. The bone of contention revolves around an alleged “debt exceeding $26 million,” corresponding to unpaid facility fees for mining operations.
Riot Platforms’ Q1 2023 fiscal report, released on May 10, accuses Rhodium Enterprises of contract violation. The alleged breach stems from Rhodium’s failure to settle hosting and service fees for using Riot’s wholly-owned subsidiary, Whinstone’s Bitcoin mining facilities.
Riot Platforms’ Legal Pursuit
Riot Platforms lodged a petition against Rhodium Enterprises on May 2 at the Milam County, Texas District Court. The plea seeks restitution of “over $26 million,” and reimbursement for any legal costs borne.
The report acknowledges the uncertainty surrounding the probability of recuperating the unpaid fees. It remarked:
“At this early juncture of litigation, it’s unrealistic to accurately gauge the likelihood of an unfavorable outcome, or the scope of such an outcome, if at all.”
Rhodium was officially served on May 8, with a response deadline set for May 30, as per the report.
Riot’s Q1 2023 Performance and Outlook
Simultaneously, the report disclosed that Riot mined “2,115 Bitcoins” during Q1 2023, marking a substantial growth of 50.5% compared to Q1 2022.
Furthermore, it was clarified that Riot has no existing associations with banks that have recently faced financial crises. The report asserted:
“Our banking relationships did not involve Silicon Valley Bank, Silvergate Bank, or First Republic Bank. We currently maintain our cash and cash equivalents across multiple banking institutions.”
Riot expects cryptocurrency mining enterprises to confront ongoing challenges in 2023, mainly due to the “marked depreciation of Bitcoin” and “other national and global macroeconomic influencers.”
The report maintained that Riot’s “industry standing,” coupled with its “liquidity and absence of long-term liabilities,” places it in an advantageous position to “capitalize on such industry consolidation.”
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