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 stated that Whinstone – a wholly owned subsidiary of Riot – has filed a petition against Rhodium Enterprises on May 3, alleging a breach of contract for failing to pay “certain hosting and service fees under agreements.”
Riot seeks to recover “more than $26 million,” plus legal fees and other expenses that are incurred during the legal proceedings, as outlined in the report.
It was further requested that “certain hosting agreements” with Rhodium are terminated and “that no power credits are owed to Rhodium.”
Extract of Riot Platforms quarterly report for the period ended March 31. Source: SEC
Although the disclosure of unpaid fees were stated, Riot was transparent with stakeholders, acknowledging that “the likelihood” of recovering the funds at this stage is uncertain. It noted:
“Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any.”
It was reported that Rhodium was served on May 8, and have until May 30 to respond.
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The report also emphasized Riot’s growth in mining operations, stating that it had mined “2,115 Bitcoins” (BTC), representing an increase of 50.5% from the number of Bitcoins mined during the first quarter of 2022.
Furthermore, stakeholders were provided reassurance in the report that Riot does not have any affiliations with the banks that have experienced collapses in recent times. It noted:
“We did not have any banking relationships with Silicon Valley Bank, Silvergate Bank, or First Republic Bank, and currently hold our cash and cash equivalents at multiple banking institutions.
Riot anticipates that Bitcoin mining companies will continue to experience significant challenges due to the significant price decline of Bitcoin and “other national and global macroeconomic factors,” as the industry saw in 2022.
It was stated that given 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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