Riot Platforms seeks $26m from Rhodium Enterprises

Riot Platforms (formerly Riot Blockchain), the bitcoin-mining company, has filed suit to recover more than $26 million from Rhodium Enterprises.

According to the filing with the SEC, the latter allegedly breached the contract by failing to pay for hosting and support services for mining operations provided by its Whinstone subsidiary.

The claimed amount includes repayment of the outstanding debt and reimbursement of “reasonable legal costs and other expenses”. Riot also asked the court to permit termination of the hosting contract.

Rhodium is due to respond to the complaint by May 30, 2023.

“As this dispute is still in its early stages, we cannot reasonably assess the likelihood of an unfavorable outcome or its magnitude should any outcome occur,” Riot said.

Meanwhile, SBI Crypto filed a suit against Whinstone on April 5, alleging breach of contract, fraud, misrepresentation, and improper handling of entrusted assets.

The SBI Holdings division sought $15 million in lost profits and $16 million for lost equipment, plus legal and other costs with interest.

Since June 13, 2022, the New York Supreme Court has been hearing GMO Gamecenter USA’s suit against Whinstone. The GMO Internet subsidiary alleged that the hosting provider breached the hosting agreement, causing a loss of “revenue and savings”. The plaintiff sought more than $50 million in damages.

Riot’s unit filed a counterclaim against GMO Gamecenter USA, accusing it of refusing to settle the claims amicably in accordance with the contract terms. Whinstone sought $25 million from the defendant for lost profits and legal costs.

Regarding Riot’s first-quarter results, the company mined 2,115 BTC — about 50% more than the same period in 2022. The increase was driven by the deployment of a “substantial number of miners”. By the end of April, the hash rate stood at 10.5 EH/s with a fleet of 94,176 active devices.

Riot Reports First Quarter 2023 Financial Results, Current Operational and Financial Highlights.

“Riot achieved a number of important milestones and records during the first quarter of 2023. In spite of damage to our immersion Buildings F and G during severe winter storms in…

— Riot Platforms, Inc. (@RiotPlatforms) May 10, 2023

The average cost to mine 1 BTC in the first quarter was $10,354, compared with $13,590 a year earlier.

Total revenue for the first quarter reached $73.2 million, of which the mining business contributed $48 million. The company posted a net loss of $55.7 million for the quarter.

As of March 31, Riot had working capital of $253.6 million and bitcoin reserves worth $202 million.

In 2022, the mining company’s revenue amounted to $259 million from mining 5,554 BTC.